Costco will increase its annual membership fees in Canada and the United States this fall.
The company announced this on Wednesday when it reported its sales results for June.
Costco says that starting September 1, Canadians with an individual, corporate or corporate add-on membership will see their annual membership fees increase by $5 to $65.
Those with an executive membership will receive a $10 increase to $130, and will also see their maximum annual rewards increase.
US Costco members will receive the same increases.
The wholesaler says the rate increases will affect approximately 52 million memberships, just over half of which are executive memberships.
The retailer’s memberships offer customers a range of incentives, including free sample testing, discounts on food, gasoline, home insurance, travel and grocery items and a 2 percent annual reward on qualified purchases at its warehouses.
The annual contribution was last increased in June 2017.
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Costco said the maximum 2 percent annual compensation associated with executive membership will also increase from $1,000 to $1,250.
The company’s shares, which have risen about 34 percent this year, rose 2.2 percent in extended trading.
“The market has been expecting (discussing) an increase in membership fees for a few years now… historically, management has tended to increase membership rates every five to six years,” said Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors.
“This announcement will come as a welcome relief to those who have been waiting for it and should provide a strong boost to both sales and shares,” Schulman added.
Membership fee revenues were up about 7.6 percent in the third quarter ended May 12. For fiscal year 2023, membership fee revenue accounted for 1.9 percent of the company’s total revenue.
In addition, Costco on Wednesday reported a 7.4 percent increase in net sales to $24.48 billion for the retail month of June.
– with files from Reuters’ Granth Vanaik
© 2024 The Canadian Press
