If you haven’t heard yet, your Costco membership fee is rising 10%. Beginning November 1st, 2011 for new members and January 1st, 2012 for renewals, the new prices will be $55 for Goldstar and Business members and $110 for Executive members. This increase will impact U.S. and Canadian memberships. This was revealed at the same time that Costco announced their fourth-quarter profits had missed analysts’ expectations, causing some to wonder if it was forced by the allegedly greedy board of directors wanting their stocks to grow. I don’t think this was the case at all. We have gone five years without a membership price increase, and operating costs are a lot higher now than then.
If you haven’t heard, it has also been announced that the long time Costco CEO Jim Senegal has announced his retirement, and will be replaced by COO Craig Jelinek. Some are saying the membership fee increase is all Jelinek’s doing and this is one of many changes to come now that our beloved Senegal is out. Truth is, Jelinek won’t take over until January 1st, and Senegal will still be on the board for at least another year. And beyond that, from what I’ve read, Jelinek is a great like-minded leader that has been at Senegal’s side for the past 10 years and with Costco for 28 years now. For some good news, it was also announced that the Executive Membership rebate cap was increased from $500 to $750. All in all, I think the fee increase will help to keep product prices from rising, so the more you buy the more you will get out of this increase. What are your thoughts? Are you okay with the increase or will it cause you to drop your membership?