No one likes seeing a recurring bill go up. When you pay for something monthly or annually, you budget for that expense, taking solace in its steady regularity. Then when it goes up, the whole cosmos seems to be thrown out of balance. And yet, thanks to the joys of inflation, recurring payments do inevitably increase. And inflation has been especially bad as of late.
Already this year, Amazon increased the price of its Prime membership. Netflix tinkered with its pricing as well. And so, probably unsurprisingly, during Costco's earnings call last week, analysts wanted to know if Costco planned to raise its membership fees, too. The answer: Yes, Costco will definitely increase prices at some point, but also definitely not yet.
For the record, Costo's membership program appears to be working well as it is. Membership fee income was up year-over-year, as was the warehouse chain's renewal rate. But when asked directly, Costco's director, EVP, and CFO Richard Galanti admitted that a fee increase would come eventually… maybe even soon.
"On average, they were done about every five — a little over every five and a half years, about five years and seven months," Galanti said. "And five years from the anniversary of the June of '17 [increase – which is the last time the membership fee increased] would be this June."
"Seven months" seems to be an oddly specific amount of time, and if accurate, that would mean the next Costco membership price increase would take place in January of 2023. But Galanti also admitted the company doesn't necessarily have an exact formula for increasing fees. "Historically, we always look at ourselves in the mirror: Do we feel that we've continued to increase the value of the membership?" he continued. "We look less at what others do, frankly, but certainly it's out there what others are doing. And what I do note is that I looked at the last three increases over the last 15 years."
Sure, it's a pretty vague answer. But like life, death, and taxes, Galanti did admit that, eventually, a membership fee price increase will come: "At some point, it will happen but stay tuned."
Costco's basic Gold Star membership is currently $60, a $5 increase from its previous 2017 price.