Costco Is Getting a New CEO. Are Big Changes in the Works?

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Costco’s CEO is stepping down. Read on to see what that might mean for members. 

Many people visit Costco on a regular basis to stock up on low-cost groceries and household essentials. But a lot of us probably don’t stop to think about what’s going on at Costco behind the scenes. And even if you happen to own Costco stock, you may not be one to keep tabs on its management team because you’re busy with, you know, life.

But it may interest you to know that a big change in Costco’s leadership is coming down the pike. Costco’s long-time CEO, Craig Jelinek, is stepping down and being replaced by President and Chief Operating Officer Ron Vachris.

Under Jelinek’s leadership, Costco expanded its footprint both domestically and abroad. Jelinek was also at the helm when Costco announced an increase in membership fees back in 2017. That change saw the cost of a basic membership rise from $55 to $60, while an executive membership offering 2% cash back rose from $110 to $120.

Now that a new CEO is taking over, you may be wondering whether the cost of your membership will go up and whether other big changes are in the works. Right now, we know very little. But one thing we do know is that a membership fee hike is inevitable at some point, and that other changes are likely.

Changes may be in the works — and many could be positive

It takes innovation and creativity to grow a business. So it won’t be surprising to see Costco’s new CEO try to breathe new life into the company (even though it’s doing well already) and help grow its customer base and revenue even more.

To that end, in the coming years, we could see an increase in Costco locations. We could also see new products and services introduced.

For all we know, Costco will soon get into the business of specialty footwear, selling everything from construction boots to soccer cleats. Or it might introduce an in-warehouse aesthetic center so you can enjoy a facial before you buy a week’s worth of milk and eggs.

To be clear, these are just hypotheticals. And chances are, Costco isn’t going to be opening in-house salons (though you never know). The point, rather, is that if you’re a Costco fan, you might get to enjoy even more benefits in the coming years as a new CEO tries to boost revenue.

A membership fee hike is likely — but not because of new leadership

Costco has not raised membership fees in more than six years, and it’s overdue for an increase based on its previous cadence of fee hikes. On a recent earnings call, CFO Richard Galanti called a membership fee hike “a question of when, not if,” but didn’t specify anything in terms of timing.

As such, it’s possible that Costco membership fees will rise in 2024. Or maybe not; the next fee hike may not arrive until 2025. But chances are, it’s coming, so that’s something to gear up for.

All told, a new Costco CEO may not impact your shopping experience in the near term. But in time, the chain might undergo positive changes that offer even more value to customers.

If you’ve been on the fence about joining Costco, you may want to sign up for a membership now that there’s a new leader taking charge. Remember, one thing Costco has always maintained is a desire to offer great customer service. That’s a core value of the company and it’s extremely unlikely to change. So if you find yourself unhappy with your membership, you can anticipate being able to get a refund in the future just as you can right now.

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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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