Last year, we wrote about how Costco is slated to see a price increase on their membership fees based on its historical data. A recent research published on Monday from Michael Lasser, a fellow UBS analyst, predicts that the wholesale club will likely raise their membership fees in the second quarter of this year (June 2017) according to Yahoo Finance. Despite last year's bumpy depart from American Express for the wholesale club and its shoppers, the firm continues to believe that Costco will increase membership fees.
"Several factors support our view... First, membership renewals and traffic growth have remained steady in the US. This suggests Costco hasn’t lost many customers as a result of moving away from American Express. Second, a more attractive private label credit card offering can help offset any pressure from an increase in fees. [Costco’s] new Citi Visa card offers 2% cash back on [Costco] purchases, which compares to just 1% on the old American Express card. This means Costco credit card customers would need to spend just $500 in a year to break even on a $5 membership fee hike."
Say it isn’t so! According to research notes from UBS analysts from a meeting with Costco executives, Costco is slated to increase their annual fees and this is how it's going to go down:
Basic Membership: from $55 to $60
Executive Membership: from $110 to $120
While Costco has not officially confirmed this price increase, a look at Costco membership fees through the years tells us that the 10% increase comes to no surprise. They have historically raised their membership fees 10% every 5-6 years and the last increase was in November 2011.
Costco's newest increase is expected to take place late this year or early 2017 (so if you’re considering a Costco membership, now would probably be a good time before the next increase).
Same as reported in 2011 by LA Times, even though the rise in prices for clubhouse membership fees may garner a few complaints, the analyst noted that it wouldn’t deter current members from renewing their membership.
Costco’s transparency, historic low prices and not to mention their newest partnership with Citi Visa (which offers more cash back then AMEX) still makes theirs one of the most valuable memberships to have.
Despite the oncoming price hike for Costco's membership, massive global e-commerce sites like Groupon or LivingSocial runs promotions from time to time where you can save up to 50% off or more on a clubhouse membership package. For example, we've seen both Groupon and LivingSocial run this Sam's Club membership package voucher deal at $25 (orig. $67) on multiple occasions. Plus, with their weekly coupon code deals, you can cut off another 5-10% off your deal.
Are you currently considering enrolling as a Costco member?