Will Runaway Inflation Lead to Higher Costco Subscriptions?

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  • A basic Costco membership costs $60 a year.
  • While the warehouse club has raised prices on certain items, so far, its membership costs have held steady.

It's a question many members are wondering about.

These days, inflation is forcing a lot of people to rack up credit card debt and raid their savings. And the problem could get worse before it gets better.

But one retailer that tends to provide relief from inflation is Costco. Thanks to its competitive price point on bulk items, Costco makes it possible for even cash-strapped shoppers to feed their families without breaking the bank -- even at a time like this.

That said, so many retailers are raising prices to compensate for their own higher costs. And the fear is that Costco may follow suit in the form of membership fee hikes. But is that something you need to worry about?

Membership fees could rise, but they haven't yet

The last time Costco raised membership prices was in June 2017, when the cost of a basic membership increased from $55 to $60. But on its most recent earnings call, Costco executives discussed the possibility of raising membership fees again.

To be fair, this wouldn't necessarily be a direct response to inflation, but rather, part of a pattern Costco has long upheld -- implementing membership fee hikes every five to six years. But either way, if Costco does increase the cost of a membership, it's something that could burden cash-strapped consumers.

Should you keep your Costco membership if prices go up?

Costco offers a lot of value to consumers who shop there often. And so if you're a Costco fan who routinely saves money by shopping at your local warehouse club, then it will probably pay to maintain your membership, even if its cost increases.

Since Costco does not have concrete plans to raise its membership fees, we can't anticipate what such a fee hike might look like. But chances are, it would be somewhere in the $5 to $10 per year range based on past increases.

Now if you commonly save yourself $500 a year on groceries and household essentials by shopping at Costco, then having to pay an extra $5 to $10 a year shouldn't cause you to cancel your membership. But if you only shop at Costco a handful of times per year, to the point where you're already questioning whether your membership is worth it, then an increase in fees could be enough to drive you to cancel.

When might Costco raise its membership fees?

Although Costco is contemplating raising its membership fees, it's not planning to do so immediately. That said, certain Costco items have already gone up in price due to general economic conditions, so while you won't have to pay more for a membership anytime real soon, your weekly grocery tab may be higher.

That said, one Costco staple that seems to be inflation-proof is its $1.50 hot dog lunch special. Costco began charging $1.50 for a hot dog and 20-ounce soda during the 1980s, and it hasn't raised the price of that combo since. So while you may end up paying more at Costco for staples like milk, bread, and produce -- and, eventually, your membership -- rest assured that you'll most likely be able to snag a budget lunch for many more years to come.

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