Club-based retailer Costco Wholesale Corp (NASDAQ:COST) is raising its membership prices after reporting lower-than-expected quarterly sales and profits amid fierce competition in the US grocery market.
Costco said it would raise annual fees by US$5 to US$60 for its Goldstar and business members and by US$10 to US$120 for executive memberships from June 1 this year.
The fee increases will impact around 35 mln members, roughly half of them executive members, the company said.
Membership fees accounted for about 72% of Costco’s operating income in 2016, according to the company.
In the second quarter of its current year to February 12, CostCo’s net income fell to US$515mln, or US$1.17 per share, down from US$546mln, or $1.24 per share a year earlier.
Costco’s total same-store sales rose 3% in the second quarter, excluding the impact of changes in gasoline prices and foreign exchange.
Story by ProactiveInvestors