For the first time since 2017, Costco (NASDAQ:COST) will raise its membership fees in the U.S. and Canada. The annual cost of the giant retailer’s regular membership will climb by $5, while the price of its upper-tier plan will increase by $10 per year. The changes will go into effect on Sept. 1. COST stock climbed by 2.5% in pre-market trading but dipped slightly into the red after markets opened.
Costco’s New Membership Prices
Starting on Sept. 1, consumers will have to pay $65 per year to be members of Costco, versus $60 previously. Meanwhile, the cost of the retailer’s higher-level “Executive Membership” will advance to $130 annually from $120 previously. About 50% of the company’s members have the higher-tier plan.
The firm has previously raised the Costco membership fee at average intervals of about five and a half years. If the retailer had followed that script, it would have increased its fees in 2022 or 2023. However, the retailer has said that it decided not to do so in order to give consumers who were dealing with high inflation a break.
Recent Positive News for COST Stock
In June, the retailer’s net sales soared by 7.4% versus the same period a year earlier. Last month ,the company’s comparable sales excluding gasoline and currency exchange fluctuations rose by 6.9%.
On July 2, investment bank Stifel reported that Costco’s market share gains in grocery and gasoline were accelerating. Stifel believes that, over the past five years, Costco has taken market share in the grocery sector from grocery chains, convenience stores and drug stores. When it comes to gasoline, Stifel reported that Costco’s gains have come at the expense of convenience stores.
Stilfel kept a “buy” rating on COST stock.
In the past three months heading into today, the shares had risen by 21%.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
