The leadership team of Costco Wholesale Corp. has confirmed that price hikes for their memberships are on the horizon. Although the specifics of when the increase will happen and how substantial it will be remain unknown.
A Matter of Time
During a quarterly earnings call on Sept. 28, Richard Galanti, the Chief Financial Officer (CFO) of Costco, expressed that a membership-cost increase is not a question of “if” but rather “when”. The company last raised its prices in June 2017, typically increasing fees approximately every five years.
A Lengthier Lapse
Galanti pointed out that the time between the previous increase and now has been slightly longer than in previous years. He also mentioned that Costco takes economic conditions into consideration when determining rates. Recent reports indicate a 0.4% rise in the cost of goods and services in August, driven primarily by higher gas prices. However, overall inflation has continued to slow.
Waiting Game
While Galanti admitted that a price hike will occur at some point, he couldn’t provide a definite timeline. He assured attendees of the earnings call that as soon as the decision is made, Costco will promptly notify members.
Enhanced Value
Despite the looming increase, Galanti emphasized that Costco aims to enhance the value provided to its members. This includes the introduction of an updated app that allows users to check gas prices by location as well as view warehouse inventory at specific stores.
Rest assured, Costco believes that the added benefits will outweigh any potential price hike.
Costco Membership Tiers and Costs
Costco offers three different membership tiers: Executive, Business, and Gold Star. Each tier comes with its own benefits and pricing options.
Gold Star Membership
The Gold Star membership has an annual fee of $60. With this membership, you have access to all Costco locations worldwide, making it perfect for personal use.
Business Membership
The Business membership also costs $60 annually. In addition to the standard benefits, it includes a free Household Card. This membership is designed for resale and business use. Business members can also add an affiliate cardholder for $60.
Executive Membership
The Executive membership is Costco’s highest level of membership. It comes with an annual fee of $120. With this tier, you receive two household cards and an annual 2% reward on qualified Costco purchases. The Executive membership also provides additional benefits such as check printing and exclusive deals on select Costco Travel services.
Costco’s Expansion into Healthcare
Costco has announced its entry into the healthcare industry by offering access to medical care for its members. Through a partnership with online marketplace Sesame, Costco joins other retailers like Walmart and Amazon in this venture.
Costco members will have access to Sesame’s marketplace, which offers various medical services at competitive prices. This includes $29 virtual primary-care visits, $79 in-person medical visits, and a 10% discount on other services. By cutting out insurance companies and allowing clinicians to set their own prices, Costco aims to provide affordable healthcare options to its members.
To learn more about retailers making a move into healthcare, click here.
