For the second time in seven years, Costco has once again increased its membership price. A number of shoppers will see this as the surest evidence yet that inflation has gotten worse—but, oddly enough, inflation is finally under control. So, what gives?
Rate Hikes
This is the first time Costco has increased its membership fees since 2017. The “Gold Star,” “Business,” and “Business Add-On” membership fees all increased on September 1 to $65 per year from $60 per year. Additionally, other memberships went up by even more.
Other Memberships
The premium-priced “Executive Membership” also increased in price, from $120 to $130 per year. To offset this larger price hike, Costco confirmed that executive members would get access to up to $1,250 in rewards, as opposed to the $1,000 they currently get. Five or ten bucks might not sound like a lot, but it means something to Costco shoppers.
Inflation Worsening?
Here’s the strange thing, though. While this could look like worsening inflation, recent data from the Federal Reserve shows that inflation is actually getting back under control lately. Maybe that doesn’t apply to Costco, then? Well, not exactly. The company rakes in plenty of profit from its membership fees. In fact, the company pulled in $4.6 billion in membership fees alone in 2023.
Cracking Down
Costco is taking a very unpopular approach to membership sharing, much like Netflix and other streaming services. While it was once somewhat easy to share your membership card with friends, the company is now clamping down by requiring members to scan their cards to enter stores. This has rankled some shoppers, as it gives the impression that the company is squeezing customers for money.
Photo ID
The new stricter rules also come with Costco encouraging members to have their photos added to their membership cards so it’s easier for them to get in the door. Moreover the company is requiring guests to be accompanied by cardholders in an attempt to crack down on non-members shopping in their stores.
Strange Business Model?
Costco and its rival Sam’s Club are both unique in that they’re essentially grocery stores you have to pay to get into. The trade-off, of course, is that they offer the lowest prices available for bulk items, making them popular for people with large families or who own businesses. But is this business model getting too pricey for some families?
Soaring Corporate Profits
Many American shoppers are getting frustrated with constant price hikes lately. Many are blamed on inflation and the rising price of goods. But, as noted earlier, the Fed says inflation is cooling off. Meanwhile, numerous American companies are showing all-time high corporate profits. At a certain point, people begin to feel squeezed.
The Vibecession
These increasing costs and constant pressure on their bank accounts is making many Americans feel a “vibecession.” All economic data points to the economy being fine, but people just feel that something is off. Why are companies so emboldened to keep charging ever higher prices?
Read More: Are Companies to Blame for Inflation?
When Does it Stop?
When will corporations stop all charging so much? How much money is enough? It turns out, the answers are, respectively, “never” and “all of it.” That’s downright heartbreaking for a lot of working-class people, as it makes them feel like they can never quite manage to get caught up.
Read More: 10 Best Things to Buy at Costco
Costco Alternatives
If the Costco membership hikes are the last straw for you, you’re not out of luck. There are alternatives to the wholesaler that you can visit instead. There’s the aforementioned Sam’s Club, which itself has a membership fee. There’s also discount grocery stores, which can often offer better deals if you shop their weekly ads.
Read More: DO NOT Buy These Items at Costco
