Costco Memberships Soar Despite Price Increase as Profits Surge

In September, Costco made a significant change by raising its membership fees for the first time in years. This price increase did not deter customers, as evidenced by the company's impressive growth in paid memberships.

By the end of November, Costco reported having 77.4 million paid memberships, a notable increase from 76.2 million members at the end of August. In the past year alone, the company has successfully added 5.4 million new members.

The membership growth occurred even in the wake of a $5 increase in the cost of basic memberships and a $10 rise for executive memberships. This suggests that customers continue to find value in Costco's offerings, despite the higher fees.

As membership fees account for a significant portion of Costco's revenue, the company has had a prosperous year. Its stock has appreciated by 52% since the beginning of 2024, delighting investors.

One factor contributing to the rise in memberships could be Costco's strict enforcement of its membership rules. Recently, the company installed scanners at entry points to prevent customers from sharing their memberships.

Additionally, Costco has set several new records in recent months, including selling the highest number of pizzas in a single day on Halloween.

To support its expanding membership base, Costco plans to open 26 new locations in 2025. Known primarily for offering food items in bulk, the company has also focused on introducing new and unique products to attract customers.

Ron Vachris, Costco's CEO, pointed out that part of the company's strategy involves continually adapting its product categories to enhance the shopping experience for members. This approach contributes to the thrill of discovering new items at Costco.

Overall, Costco's growth in membership even after a price increase reflects its strong market presence and customer loyalty.

Costco, Memberships, Growth