Costco Increases Membership Fees

Bryan Dijkhuizen

Is the membership still profitable for customers?

Note From The Author

The opinion of the author is his own and has no affiliation with the topic that was included. Sources that are used in this article are the following: Eat This Not That and for information about individuals, he used Wikipedia.

Introduction

This year, inflation has proven to be a significant obstacle for the majority of retail establishments, but wholesale warehouse clubs have actually profited from consumers looking to escape the effects of increasing costs.

In return for a yearly membership fee, warehouse merchants such as Costco provide their customers with member discounts on the pricing of bulk products.

As of the end of the year 2016, Costco was the most successful retailer in the world of choice and prime beef, organic goods, rotisserie chicken, and wine, which will place it as the third most successful retailer in the world by the year 2020, according to Wikipedia

The Current & Future Prices

At this time, the cost of a Basic yearly membership at Costco is $60, while the cost of a "Gold-Tier" membership is twice as much, coming in at $120.

At the beginning of this month, Sam's Club, which is owned by Walmart, made the announcement that the annual membership prices would be increasing from $45 to $50 for an entry-level membership and would increase to $110 from $100 for a "Plus-Level" membership.

However, it seems like Costco is not going to change its present price structure anytime soon. The overall sales of the retailer climbed by 15% in the last quarter, reaching around $72.10 billion, which was far more than the projections of the majority of industry experts.

These figures stand in sharp contrast to Target Corporation's most recent report, which detailed a fall in quarterly earnings.

This loss was most likely caused by consumers concerned about inflation who was seeking ways to save more money and spend less.

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