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Costco is getting a shake-up. Read on for some key changes that recently took place or will be happening soon. [[{“value”:”
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Costco isn’t necessarily a retailer that makes a lot of breaking news. After all, it’s not like the store is going through a rapid expansion or closing locations because it’s struggling.
But actually, Costco happens to be going through a few big changes right now. Here are three major ones you need to know about.
1. Membership fees are going up
A basic Costco membership currently costs $60 a year, while an Executive membership costs $120. But after a seven-year reprieve from fee hikes, members will have to pay more starting Sept. 1. At that point, the cost of a basic membership will rise to $65 a year, while an Executive membership will cost $130.
To be clear, though, Costco isn’t going to ask you for more money on Sept. 1 if your membership isn’t up for renewal. Rather, once your renewal date arrives, you’ll be subject to the higher price. If you’re someone who hasn’t yet joined but are thinking about it, though, then you may want to sign up this month for $5 or $10 less.
2. Non-members are banned from food courts
Costco’s famous $1.50 hot dog and soda combo has long been a draw for customers. Costco used to allow non-members to access its food courts as a means of getting them in the door and perhaps enticing them to join.
But recently, Costco changed its policy. Now, if you’re not a member, you can’t use the store’s food court — period.
This change clearly isn’t great for people who enjoy grabbing a quick meal but don’t want to pay for an annual membership. But it’s a positive one for Costco members.
Limiting food court access to members could mean shorter lines to grab your hot dog, pizza, or meal of choice. Plus, everyone knows that Costco’s parking lots are perpetually jam-packed. If non-members can’t come in for a bite, it means they also won’t be taking up room in the parking lot.
3. Executive membership rewards are changing
As mentioned, the cost of an Executive membership will soon rise from $120 a year to $130. But the amount of cash back you can rack up with an Executive membership is also increasing from a maximum of $1,000 per year to $1,250.
Before you get too excited about that, though, realize that to score $1,000 a year at a rate of 2% back on purchases, you have to spend $50,000 at Costco in the course of a year. To score $1,250, you have to spend $62,500. Unless you’re feeding an entire village for a year, your Costco spending probably won’t come close, and your annual Executive membership reward will probably be a lot smaller than the maximum.
Now that Costco has made some pretty substantial changes, it may be a while until we see more come down the pike. But pay attention to Costco in the news, because you never know when a surprising announcement might come through.
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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
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