Costco May Be Raising Their Membership Prices Soon. Here’s What We Know.

I can’t say I am surprised with this one. Word on the street is, Costco May Be Raising Their Membership Prices Soon. Here’s What We Know.

Costco Store Front

For starters, the constant rise in prices truly doesn’t phase me anymore. I sort of anticipate it now so it really isn’t shocking that Costco would need to up their membership fees too.

Is Costco Raising Their Membership Fee?

It has been five years since Costco has raised their membership fee and according to financial analysts, Costco is just a few months away from raising their membership fees once again.

“We believe we are now 8-9 months away from a likely membership fee increase, a historical catalyst for the shares. As is well known, Costco has increased its annual membership fee every five and a half years by $5-10. On this timetable, the next hike would come in August-September 2022. The Gold Star fee would go to $65 from $60 while the Executive membership would move to $130 from $120,”

Guggenheim analyst John Heinbockel

While the price hike may be bad news for some, if you happen to own Costco stocks, it actually may benefit you.

If you compare the last few price increases on membership fees to the stock, you will see that the price changes actually benefited Costco stock.

Costco’s last three membership fee increases in 2006, 2011 and 2017 shows the stock rose on average 11% three months prior to the announcement. The stock gained on average 15% six months prior to the announcement.

Yahoo

“Because membership fee increases are so predictable and beneficial to the bottom line, investors anticipate them with Costco shares typically outperforming the S&P 500 by 15-20% in the 6-12 months before the membership fee increase announcement. Solid outperformance is also seen in the three months prior,”

Guggenheim analyst John Heinbockel

So, there you have it. We may be seeing a Costco membership price increase come 3rd quarter 2022 but if you own stocks in the company, this could be good news for you.

Also, it may be a good reason to renew your membership early especially if you need to renew it around the time the price increase would take place.

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