Walmart-owned Sam’s Club is upping its membership fees Monday for the first time in nearly a decade.
CEO Kathryn McLay told customers in a recent note the retailer is raising its annual membership fees to $50 from $45 for Club members. The $5 increase is the first in nine years. At the same time, Plus memberships will increase t0 $110 from $100, the first increase since 1999, when they were first introduced.
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The increases come after the warehouse club said it “invested in technology to improve the shopping experience” by upgrading all 600 clubs, created a new rewards program called Sam’s Cash and added new brands to the store.
Still, McLay said the company recognizes the financial pressures shoppers are facing right now with worsening inflation. As a result, the company will give customers who renew their membership a credit equal to the increase for this year only.
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Shortly after the renewal takes effect, Club members will get $5 in Sam’s Cash. Plus members will receive $10 in Sam’s Cash, according to McLay.
The fee increases hit at a time when the Walmart-owned membership club alongside competitors BJ’s Wholesale Club and Costco have seen an increase in foot traffic even with inflation.
According to data from Placer.ai, visits to Costco, BJ’s, and Sam’s Club in July exceeded 2019 by 3.4%, 7.5%, and 10.5%, respectively.
Unlike Sam’s Club, though, Costco recently announced that it didn’t have any concrete plans to up fees for its customers.
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“In terms of membership fees and a possible increase, there are no specific plans regarding a fee increase at this time,” Costco Chief Financial Officer Richard Galanti said during the company’s earnings call in September.
Galanti added that the company has been “pleased with our growth in both top line sales and membership households over the last several quarters and in member loyalty as reflected in increasing member renewal rates.”
Historically, the company increases its membership costs about every five and a half years. Galanti noted the last three increases were spaced on average five years and seven months apart.
Costco, which last raised its membership fees in June 2017, currently charges $120 per year for executive memberships and $60 per year for its Gold Star and business memberships.
Like its competitors, BJ’s Wholesale Club CEO Bob Eddy said in August that its “strong results in the second quarter were led by gains in traffic.”
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| COST | COSTCO WHOLESALE CORP. | 454.65 | -13.34 | -2.85% |
| WMT | WALMART INC. | 130.43 | -1.85 | -1.40% |
| BJ | BJS WHSL CLUB HLDGS INC | 71.03 | -1.18 | -1.63% |
PRICE INCREASES COME EASILY FOR BIG BUSINESSES, BUT INFLATION STILL SQUEEZES PROFITS
Eddy further noted that its “member base is growing in both quality and size.”
Representatives for BJ’s Wholesale Club have not immediately responded to FOX Business’ request for comment on if their membership fees will increase.
However, a basic membership for BJ’s Wholesale Club costs $55 per year. It’s Perks Rewards membership costs $110 per year.
FOX Business’ Lucas Manfredi contributed to this report.
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