Is Costco membership still a good deal?
The warehouse store is raising its membership fees for the first time in 5 years.
Groceries have been putting a bigger dent in your checking account, and now so will the privilege of buying them in bulk at America's largest warehouse store. Costco is raising its membership fees by 10%.
- U.S. individual (Gold Star) memberships and business memberships in the U.S. and Canada will cost $55 a year, up $5. It's the first fee increase since 2006.
- Executive members, who earn cash back on what they spend in the stores, will pay $110, up by $10, the first fee increase for them since 1997. Also, The Seattle Times reports that "the maximum 2% reward tied to the executive membership will rise from $500 to $750."
- The higher rates go into effect Nov. 1 for new memberships, so if you're planning to join, do it now.
- For current members, the higher rates take effect whenever they renew after Jan. 1.
- All told, 22 million members will be paying higher membership fees.
- BJ's Wholesale Club increased its membership from $45 to $50 in January. Sam's Club's is hanging steady at $40, The Wall Street Journal reports.
Will people drop their membership because it costs more? Costco doesn't think so. The Seattle Times quoted Costco chief financial officer Richard Galanti:
"Historically, we have very little falloff from it," he said. "We don't take it lightly. ... Every time we do it, we look at ourselves in the mirror and figure we've increased the value of that membership by more than that. Maybe we're fooling ourselves, but we don't think so."
What do consumers think? An online poll at The Street registered 168 voters who said the higher cost is worth it, and 154 who said they'd shop somewhere else. No comments were left, last time we checked. Mass outrage over the price increase was not apparent in other locations -- even at Costco's Facebook page.
A few called the company "greedy" and a slave to Wall Street's expectations. There is a bit of truth to that. Reuters says:
While the increased fees could add 20 cents to 25 cents to earnings per share over the next two years as memberships are renewed, Janney analyst David Strasser expects roughly half of the fee increase will be used to hold down prices.
Other Facebook posters said if you don't like it, you know what to do. Kristin Kauno said:
… I have been a customer since day 1 and I think the fee was only $40. Now 20+ years later it will be $55 and worth every penny! You can easliy shop elswhere if you don't like it and think you can save more money somewhere else.
An online discussion we found was also tame. "Since that's less than an extra 42 cents per month, I think I will be renewing my Costco card even if it does go up to $55 per year. It's still worth it to me," one commenter said.
A former member, I'd happily pay the higher fee if I still had a Costco nearby. You'll still save money if you apply some basic tips: Post continues after video.
- Check the unit price. You really have to know the unit price to compare what you would spend at Costo vs. other stores and see how much you'd be saving (or not).
- Don't buy more than you can store or use before it goes bad.
- Stick to what you need. However, I must say that the hugely discounted waterproof Sorel boots I hadn't expected to buy are still my standard winter shoes 12 years later. Sometimes you have to be smarter than your shopping list.
Costco is doing brisk business, by the way. U.S. sales in the fourth quarter were up 10%. But not all the news was sweet. Bloomberg says:
The retailer's profit margins have narrowed this year as costs climb for gasoline and food items such as coffee and cheese. The company said the rising cost of inventory reduced profit by $32 million, or 4 cents a share, last quarter.
More on MSN Money:
Greed will sink them., They have already raised the prices on their products, and now this. I can find much better bargains on the Internet without a Costco Card at Amazon, Tiger Direct, and Overstock .com, even Fry's Electronics have better deals than Costco. You just have to shop around and shop smart.
Why pay a company to shop at their stores. They should be offering you discounts to get you to shop at their businesses imo.
As for food, my local shops, Walmart or even on Amazon offer much better bargain prices. I don't have to hand out money to Costo to shop. I can do it free everywhere else.
Why aren't people demanding a march on wall street denouncing the evil capitalistic Cotsco? Food prices go up, grocery stores charge the consumer more. Duh. Dem. Govt. regulations on banks cutting the amount they can charge the store owner per transaction, banks find a way to recoup those losses. Duh. Govt. taxes small businesses, small business owners have to lay people off. No brainer. I am so sick of stupid people that just don't get it. Get rid of Obama and the Dems that have no clue as to how our economy works.
Why are people comparing Costo to Sam's Club??? Thats like comparing Walmart to Macys. Costco is a higher end wholesale warehouse selling some of the same, but mostly better quality food and merchandise. If there is a Costco relatively close to you, it is definitely worth the membership depending on what you are buying. I would happily pay the higher membership because I save ALOT everytime I shop there. They have higher end name brand clothes also. I get my kids REAL DOWN JACKETS for $39 and Marc Jacobs down coats for me for $69. I saw these same coats online at other retailers for over $150! Costco is in a class by itself. If you are squawking over $5 or $10, you obviously dont see the value and you can shop other places for free!
Costco & Sam's are very much alike and I find the quality at Sam's the same or better than Costco. MANY of the products are exactly the same & Sam's in my area has MUCH better meats and by far a larger selection of cuts.
I don't need any fancy foods...I can make those myself if I so choose....SOOOOO, I won't be renewing my Costco membership. Sam's carries many more products I use. To shop at Costco I have to drive at least 70 mi. one way & I have 2 Sam's within 45 mi. in 2 different directions.
They were already $10 higher on their membership fees than Sam's....nope, not gonna stay with them. I prefer down to earth products...NOT high end!
I have been a member for 26 years and Costco could give a rats rear end!!! At 25 years I thought perhaps they might say--- "THANKS" but nothing.
I will not renew my membership. Has ANYONE totaled up what 22 million customers @ $55.00 is?
P U R E G R E E D as is rampant in MOST all businesses today!!!
In the news Costco's profits up 11 % so they raise the memberships fees 10 %??. Do they respect their customers ?? I've done a lot of price comparisons between Costco and sales of other stores. Costco rarely beats the sale prices. Many times their more expensive. Only savings is on OTC drugs. Not worth the increased memberships fees. I will not renew. I want to save money and not feed their CEO's excess income.
I buy chicken breast, which is ON-SALE every week at either Path Mark, Shop Rite or Stop&Shop,
for $1.99lb ... NO WAY that these clubs even come close to that. Milk and eggs are a good deal but the bottom line is their prices are only 'OK' and you can find MUCH BETTER DEALS if you look for sales in your local supermarkets ... and you don't have to buy a truck-load of product ... Also specific to Costco ... what's up with them not taking Visa or MasterCard ...??? I wouldn't join just because of that alone ... I belong to ****'s because a friend of mine works there and I got a FREE MEMBERSHIP ... otherwise I probably wouldn't belong to any of them ...
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