Costco to Increase Membership Price, But When?
Earnings Call Reveals Plans for Future Hike
During Costco’s quarterly earnings call on Thursday, the company’s Chief Financial Officer, Richard Galanti, hinted that the wholesale retailer plans to increase its membership price. However, he couldn’t provide a specific timeline for the change. "It’s a question of when, not if," Galanti said. "You’ll see it happen at some point. We can’t really tell you if it’s in our plans or not."
Six Years Since Last Price Increase
This would be the first price hike since June 2017, with Galanti noting that six years is "a little longer" between price increases than in the past. This long hiatus has likely contributed to the company’s ability to maintain its large customer base.
Expansion of EV Stations and Other Initiatives
In other news, Costco has begun testing electric vehicle (EV) stations at its locations, building on its reputation for offering lower gas prices to its members. The company is also exploring other initiatives, including a new healthcare partnership with Sesame.
Cracking Down on Card Sharing
Costco has identified an issue with card sharing, which has led to an increase in memberships. In response, the company is conducting spot checks at self-checkout counters to ensure that only authorized members are using the service.
Membership Growth
Despite the challenges, Costco continues to see growth in its membership numbers, with a 7.9% increase in household memberships year-over-year. This represents a significant rise, although part of this growth may be attributed to the company’s efforts to combat card sharing.
Conclusion
As Costco looks to the future, it seems likely that the company will increase its membership price at some point. While the exact timing is unknown, the company’s CFO has confirmed that it is a matter of "when, not if." In the meantime, customers can expect to see new initiatives and services, including the expansion of EV stations and a new healthcare partnership.
FAQs
Q: When will Costco increase its membership price?
A: The company’s CFO, Richard Galanti, has indicated that it’s a matter of "when, not if," but a specific timeline has not been provided.
Q: How long has it been since Costco last increased its membership price?
A: It’s been six years since the last price increase, in June 2017.
Q: What new initiatives is Costco announcing?
A: The company is testing EV stations, expanding its gas station offerings, and partnering with Sesame for a new healthcare initiative.
Q: Why is Costco cracking down on card sharing?
A: The company has identified an issue with card sharing, leading to an increase in memberships, and is conducting spot checks at self-checkout counters to ensure authorized member use.
