This week US-based multinational membership-only wholesale retailer Costco implemented its first membership fee increase since 2017 for Canadian and U.S. customers. This move comes alongside new measures to prevent non-members from accessing its warehouses.
The company revealed in July that annual membership fees would rise by $5 to $65 for three of its plans: “Gold Star,” “Business,” and “Business Add-On.” These changes took effect for new members signing up on or after September 1 and for renewals occurring after that date.
Costco’s premium “Executive Membership” also saw a price hike, increasing by $10 to $130 annually. However, Executive members will soon benefit from an increased annual reward cap of $1,250, up from the current $1,000 limit.
The fee increase is expected to impact approximately 52 million memberships, with Executive members accounting for slightly more than half of this figure. Costco has long relied on membership fees as a significant profit generator, using this revenue to offset expenses and maintain competitive pricing.
In the previous fiscal year, Costco’s membership fee revenue reached US$4.6 billion, marking an 8% increase from 2022. This substantial income stream plays a crucial role in the company’s business model, allowing it to offer competitive prices on a wide range of products.
Alongside the fee increases, Costco is implementing stricter access controls to curb membership sharing. The company plans to introduce membership scanning devices at warehouse entrances, requiring all members to scan their physical or digital membership cards before entry.
“Over the coming months, membership scanning devices will be used at the entrance door of your local warehouse,” Costco stated. This new policy aims to ensure that only valid members and their guests can access Costco’s facilities.
For members whose cards lack a photo, Costco advises bringing a valid photo ID. The company says it encourages these members to visit the membership counter to have their photo taken, streamlining future visits.
Additionally, Costco now requires all guests to be accompanied by a valid cardholder when entering its stores. This measure is designed to prevent non-members from using membership cards that don’t belong to them.
As of September 2024, Costco operates a vast network of 884 warehouses globally. This includes 611 locations in the United States and Puerto Rico, and 108 in Canada — representing a higher penetration of stores per capita. The company’s international presence spans several countries, including:
- 40 warehouses in Mexico
- 33 in Japan
- 29 in the United Kingdom
- 18 in Korea
- 15 in Australia
- 14 in Taiwan
- 7 in China
- 4 in Spain
- 2 in France
- 1 each in Iceland, New Zealand, and Sweden
Costco’s e-commerce operations complement its physical presence, with online platforms serving customers in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan, and Australia.
