Costco Wholesale Corporation (NASDAQ:COST), a warehouse popularly known for selling a variety of low-priced items seems to be becoming expensive by the day. The store, which is also a NASDAQ Stock, it will be increasing the basic membership fee by $5 effective June 1. The company’s ‘gold start’ will now pay $60 annually up from the current $55. Executive members will pay $120 up from $110. However, with the increase, the store is also increasing its annual maximum reward by 2% to $1,000 up from $750
This marks the first time the store is increasing the membership fee since 2011. Chief retail strategist at Shoptalk Sucharita Mulpuru says the increase shouldn’t be a worry for the store’s diehard fans. She says a shopper who can afford $55 initially paid together with the average cost of the Costco basket is already the store’s affluent customer.
Many of the company’s shoppers especially with big families will save enough in a period of a year to pay the $60 cost. Additionally, the company offers remarkable discounts on pharmacy items to its members. It is therefore frequented by members with large drug prescriptions. A $5 increase may therefore have little impact on these members. This is because insurances don’t cover all prescriptions.
The store offers items which other renown and big NASDAQ Stock stores don’t offer. These include rental discounts, gasoline and vacation packages which is accessible to all members. Wine, Tires, movie tickets, gift cards, Nutella, pure vanilla extract and Extra Virgin olive oil are some of Costco’s best deals.
Members, who have been neutral about their membership, may want to reevaluate. After the increase, Costco’s membership fee will be $15 higher than the $45 charged by rivals Sam’s Club for standard membership. Sam’s Club’s package is however limited and does not include pharmacy discounts. Costco’s fee will also be $10 above the $50 membership fee at BJ’s stores.
Sam’s Club online is partnering with Ebates,a cash back site to offer shoppers a 1.5% cash back. However, Costco does not offer such incentives.