NEW YORK (MainStreet) — Costco just became a little bit more costly for consumers.
The wholesale club will soon charge $55 a year for Gold Star and business memberships and $110 for executive memberships, an increase of $5 and $10 respectively, the company announced Wednesday. The price hikes will take effect Nov. 1 and are intended to boost profits without raising prices on products.
The big-box retailer estimates that 22 million customers will be impacted by the price changes, about half of which are executive members, which should help the company bring in a substantial amount of extra revenue.
Costco’s net sales increased by a modest 10% in the 2011 fiscal year, but the company’s administrative and merchandise costs increased as well, cutting into its profits. Many other companies like Coca-Cola and Smucker’s opted to raise prices on products this year when faced with higher operational costs, but Costco has decided to go the route of raising membership costs instead.
Of course, if you really don’t want to fork over the extra $5-$10, there is a way to shop at the chain without a membership, but it involves a little bit of crafty thinking.
—For a comprehensive credit report, visit the BankingMyWay.com Credit Center.