Costco CEO Says Membership Fee Hikes Are Unlikely, Despite Inflation
- Costco recently raised the price of some of its products, leading to concerns that membership fees might go up too.
- But Costco CEO Craig Jelinek has said that raising membership costs isn't on the table right now.
Talk about encouraging news.
These days, living costs are rising across the board as inflation continues to rear its ugly head. That's forcing many retailers to impose price hikes in an effort to keep up.
Costco hasn't been immune to price hikes. Although the warehouse club chain prides itself on providing the maximum amount of value for consumers, the reality is that every business out there is facing higher expenses across the board. And those that don't take steps to make up for that risk a host of unwanted consequences.
As such, Costco has recently raised the price on some of its warehouse club products. It also increased the cost of some food court favorites, like soda and its much loved chicken bake.
Now the good news is that Costco has no plans to raise the cost of its iconic $1.50 hot dog and soda combo. But even better news is that the warehouse club chain has no near-term plans to raise the cost of a yearly membership.
Costco fans can breathe a sigh of relief
Earlier this year, there were rumors going around that Costco was headed for membership fee hikes. Part of that line of thinking stemmed from general inflation. But also, Costco has, in the past, hiked up its membership fees every few years. Since it's been a while since a fee increase was implemented, it's easy to see why consumers might start to anticipate one.
But recently, Costco CEO Craig Jelinek told CNBC that a membership fee hike is not on the table right now. Although Costco is due for an increase, Jelinek insists that now's not a good time to take that step. And that's something Costco fans can be grateful for.
Interestingly enough, most of Costco’s profits are said to come from membership fees rather than the items sold in stores. But thankfully, members don't have to worry about those fees rising in the near future.
Is your Costco membership worth the money?
A basic Costco membership costs $60 a year. Upgrading to an executive membership means spending $120 a year, but also getting additional cash back on warehouse club and online purchases.
If you've been struggling to make ends meet due to higher living costs, you may be wondering if it's worth paying your Costco membership fee. And the answer boils down to math.
Many consumers routinely save money on groceries and household essentials by purchasing them at Costco in bulk. You might rack up a $75 credit card tab by purchasing your meat, produce, and dairy items at Costco each week. But if those purchases would cost $90 at your local supermarket, it's easy to make the argument that your membership fee is worth paying.
Remember, too, that Costco doesn't just make lower-cost essentials available to customers inside its stores. It also offers lower-cost gas. And at a time when fuel has gotten so expensive, the savings there could also help justify the cost of a membership.
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