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Costco hikes membership fee for the first time since 2017
Costco has increased its membership fee for the first time in seven years.
The membership-based warehouse announced on Wednesday that the hike will take effect on September 1.
It is the first increase since June 2017, and will go up by $5 a year for the standard membership - taking it from $60 to $65 annually.
The Executive level - which offers a 2 percent rebate on all Costco purchases made that year up to a total of $750 - will increase by $10 to $130 a year.
Many had been expecting a rise very soon - since the retailer normally increases fees every six years or sooner.
Pictured is a Costco member holding a membership card. Costco has charged between $60 and $120 a year for membership since June 2017
Costco said the rise will hit 52 million memberships, around half of which are the top level.
Shares rose two per cent after the news - with investors knowing that higher fees bring in more profits.
At the old rates, the fees bring in around $4 billion-plus a year.
Until this latest rise, there had been seven membership fee hikes since Costco's founding in 1983 - each time by $5. On average they took place once every five years or so.
The longest period over which the annual membership fee has remained unchanged was between 1983 and 1992.
Its $25 annual fee in 1983 would be about $78 today, according to US Bureau of Labor Statistics inflation data.
After 1992 the periods between rises were around two and three years. Since 2006 they have been between five and six years. So the stretch until now is one of the biggest.
Richard Galanti - who had been CFO since the early 1980s - left earlier this year.
In recent years he had vowed to keep membership flat as Americans battled with rising costs and stagnant wages.
Costco CFO Richard Galanti (pictured) told investors last year that it would not be raising annual membership fees in the immediate future
His replacement Gary Millerchip took over in March - and was widely expected to raise prices.
While members may have enjoy lower membership fees, investors have long been waiting for executives to finally boost them in a move that would increase the company's revenue.
In the three months ending ending February 18, Costco generated $1.11 billion in membership fees - that was almost 2 percent of its total revenue for the quarter.
It means Costco nets around $4 billion-plus a year from the fees - a figure that will likely go up with the increase.