Why Experts Believe Costco Membership Fees Will Increase

Plenty of food lovers and home cooks rely on Costco, the 500-plus-locations-strong wholesale giant that offers deep-discount deals on staple items such as canned tomatoes, olive oil, salt, pepper, and maple syrup, to name just a few. Beyond food, the wholesale chain also sells an array of competitively priced gadgets ranging from the air fryer to the Instant Pot to Vitamix blenders — all of which come together to make a Costco membership more than worth it for those who spend a lot of time in the kitchen.

But financial experts say that might soon change. Known for raising its membership fees every five-and-a-half years or so, that hike will soon be due in Costco stores, with fees likely going up by between $5 and $10 by August or September 2022 (via Kiplinger). But what is the motivation behind these regular membership price increases?

Over the years, according to Kiplinger, Costco stores have increased membership fees about every five-and-a-half years, and, given that the last price hike occurred in 2017, when the Gold Star membership jumped from $55 to $60 and an Executive membership increased from $110 to $120, financial analysts are predicting that Costco's next increase will hit this summer, or by September at the latest. "We believe we are now 8-9 months away from a likely membership fee increase," Guggenheim analyst John Heinbockel predicted in late December (via Yahoo Finance). "The Gold Star fee would go to $65 from $60 while the Executive membership would move to $130 from $120."

Other than the membership increases being an established pattern for Costco, one likely motivation is to keep the current low prices for some of its top-selling items: its rotisserie chicken and hot dog combo. According to The Street, the ready-to-eat birds have maintained their $4.99 price since 2009 and are a customer favorite that drive membership. But given their low price, Costco doesn't even make a profit off of them, with some suggesting Costco actually loses $30 to 40 million per year on the birds.

As for that $1.50 hot dog and soda combo, 425 Business reported that Costco co-founder Jim Sinegal once threatened to kill CEO W. Craig Jelinek if the price increased. Given the store's firm commitment to maintaining these low prices, it's likely that increasing the cost of memberships is a way to curb losses.