Costco could increase membership charges: UBS analyst
25 Apr 2016
Membership warehouse club, Costco might raise the cost of membership according to a UBS analyst. Consumers pay an annual fee to shop at Costco stores.
Costco is expected to hike its basic Gold Star Membership to $60 from $55, and its Executive Membership price to $120 from $110.
If Costco were to hike the fee, it would follow the pattern it had set of hiking the fee every five or six years, with the last increase in November 2011.
The Motley Fool reported that Costco had hiked basic membership by $5 three times in the past 16 years.
Chief financial officer Richard Galanti told The Huffington Post on Friday that it had not announced if, or when, it would increase the membership fee.
The cheapest Gold Star Membership, includes an additional card for a household member living at the same address.
The most expensive, Executive Member offered a 2 per cent reward on most purchases members made at the store.
Costco members rose 6 per cent last year to over 81 million and 91 per cent of US customers renewed their membership in 2015.
Meanwhile, Costco after ending longtime partnership with American Express is preparing to switch credit card partnership and shoppers would need to use a Visa card to pay from 20 June (See: Costco ends AmEx alliance, partners with Citi, Visa).
The switch would bring Costco another 2 million members according to UBS.
The 31 weeks to 3 April, saw Costco net global sales of $68.96 billion a 2 per cent increase from $67.59 billion during the same period last year.
In the 2015 financial year, the company made $2.53 billion from membership fees, which accounted for about 70 per cent of its operating income and over the period, increased its membership numbers by 6 per cent to over 81 million.
