5.2 C

Costco’s not raising annual membership fees yet, but it’s bracing customers for it—’It’s when, not if’



Costco hasn’t raised the price of its annual membership since 2017—and it says it’s not planning to do so immediately—but the retailer is warning customers they will be paying more in the future.

Chief financial officer Richard Galanti, speaking on an earnings call Thursday, said “it’s when, not if,” when asked about increases to the fees. (Costco typically raises its membership fee every five years or so, and analysts have been anticipating a jump for some time now.)

This was Galanti’s last call as CFO, as he plans to retire in mid-March (and will be replaced by Gary Millerchip). He joked on the call that the announcement of higher fees would be a burden he no longer had to bear.

“I’ve been joking with Gary: It will be on his watch, not mine,” Galanti said.

Another sign higher fees might be coming? Costco fell short of analyst expectations for the holiday quarter. Revenue came in at $58.44 billion, compared to an expected $59.16 billion. (Earnings per share were higher than expected, though, at $3.92 per share vs. an expectation of $3.62.)

While the company hasn’t raised the price of a Costco membership, it has been cracking down hard recently on members who share their cards with friends. Most stores now pair membership cards with photo IDs at checkout. And one location recently started requiring members to scan their cards when they enter the store, as opposed to the long-standing practice of just flashing a card at the store employee on duty.

The push to eliminate membership sharing started last June. The company, at the time, said in a statement: “We don’t feel it’s right that non-members receive the same benefits and pricing as our members. Costco is able to keep our prices as low as possible because our membership fees help offset our operational expenses, making our membership fee and structure important to us.”

Subscribe to the new Fortune CEO Weekly Europe newsletter to get corner office insights on the biggest business stories in Europe. Sign up for free.

Source link

Subscribe to our magazine

━ more like this

‘Change agent’ Caitlin Clark prompts advertiser free-for-all: ‘She’s jump-started a new era of basketball, and she’s propelling women’s sports forward’

Caitlin Clark’s college basketball career has come to a close, but her professional career is just getting started—and fans and brands alike are...

NASA confirms 4-inch piece of space junk from International Space Station crashed into Florida man’s home

NASA confirmed Monday that a mystery object that crashed through the roof of a Florida home last month was a chunk of space junk from...

3 states consider Bayer-written legislation giving it immunity for Roundup cancer claims as it reels from $10 billion in verdicts and counting

Stung by paying billions of dollars for settlements and trials, chemical giant Bayer has been lobbying lawmakers in three states to pass bills...

Singaporean ship that collapsed Baltimore bridge had electrical problems at port, source says

Hours before leaving port, the massive container ship that caused the deadly collapse of a Baltimore bridge experienced apparent electrical problems, a person with knowledge...

Boeing fights off fresh whistleblower allegations, while saying employee reports have ‘exploded … which is what we want’

Boeing is defending the integrity of the fuselages on two of its largest planes, which have come under criticism from a whistleblower who warns that...