Costco members in Canada will have to pay more starting this fall – National

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Costco is increasing its annual membership fees in Canada and the United States this fall.

The company made the announcement on Wednesday as it reported its sales results for June.

Costco says that effective Sept. 1, Canadians holding an individual, business or business add-on membership will see their annual membership fees go up by $5 to $65.

Those with executive memberships will receive a $10 increase to $130, and will also see their maximum annual rewards increased.

U.S. Costco members will receive the same increases.

The wholesale retailer says the fee increases will affect around 52 million memberships, a little over half of which are executive memberships.

The retailer’s memberships offer a range of incentives to customers, including testing of free samples, discounts on food, gas, home insurance, travel and grocery items and an annual 2 per cent reward on qualified purchases at its warehouses.

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The annual fee was last raised in June 2017.

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Costco said the maximum annual 2 per cent reward associated with executive membership will also increase to $1,250 from $1,000.

The company’s shares, up about 34 per cent this year, rose 2.2 per cent in extended trading.

“The market has been expecting (discussion of) a membership fee hike for a couple years … management historically tends to raise membership rates every 5 to 6 years,” said Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors.

“This announcement will be a welcome relief to those who have been waiting for it and should provide a solid lift to revenue as well as the stock,” Schulman added.

Revenues from membership fees had increased about 7.6 per cent in the third quarter ended May 12. For fiscal 2023, membership fee revenue accounted for 1.9 per cent of the company’s total revenue.

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Separately, Costco reported on Wednesday a 7.4 per cent increase in net sales to $24.48 billion for the retail month of June.

— with files from Reuters’ Granth Vanaik

&copy 2024 The Canadian Press

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