Costco Members Better Prepare After This Bad News

It looks like Costco membership fees are going up soon. USB analyst Michael Lasser published a research note on Monday revealing that the firm believes Costco will hike their membership prices most likely in Q2.

The increase the firm expects is for $10 more annually for the Executive memberships and $5 more annually for the Gold Star members. Currently the Executive membership goes for $110 per year and the Gold Start membership is $55 annually.

Lasser first noted his expectation for a membership increase earlier this year when he wrote that the chain raised fees every 5 to 6 years. The last increase was back in 2011.

The firm wrote, “Several factors support our view. First, membership renewals and traffic growth have remained steady in the US. This suggests Costco hasn’t lost many customers as a result of moving away from American Express. Second, a more attractive private label credit card offering can help offset any pressure from an increase in fees. [Costco’s] new Citi Visa card offers 2% cash back on [Costco] purchases, which compares to just 1% on the old American Express card. This means Costco credit card customers would need to spend just $500 in a year to break even on a $5 membership fee hike.”

Disclaimer: We have no position in Costco Wholesale Corporation (NASDAQ: COST) and have not been compensated for this article.