Costco Doesn’t Plan On Raising The Price Of These 3 Items, Despite Record Inflation

While prices are rising at most retailers due to record-high inflation, Costco (COST) maintains that, for now, it will keep the cost of some items at its wholesale stores the same.

As Costco released its Q3 earnings report on Thursday, beating analyst expectations, it said that it is “not the right time” to raise its annual membership fees.

Costco reported a sales increase of 16.3% to $51.61 billion for the quarter, up from $44.38 billion in 2021.

Speculation has swirled that Costco was set to increase its membership fees this year, especially as its retail rival Amazon raised the price of its Prime membership earlier this year for the first time since 2018.

Amazon’s Prime memberships increased from $12.99 to $14.99 a month and $119 to $139 a year.

Costco offers two types of club memberships, according to its website.

Its Gold Star membership costs $60 a year and includes two cards per household as well as access to all clubs worldwide and Costco.com. Its Executive membership costs $120 a year and earns 2% back on qualifying purchases up to $1,000, plus additional savings on travel booked through Costco Travel as well as other benefits.

The last time that Costco increased its club membership fees was in June 2017, with previous increases happening five to six years apart, Bob Nelson, the company’s senior vice president, said during an earnings call Thursday, as reported by Axios.

Costco is holding its membership fees for now as Nelson said, according to Axios, “Given the current macro environment, the historically high inflation and the burden it's having on our members and all consumers, we think increasing our membership fee today ahead of our typical timing is not the right time.”

But membership fees are not the only item that Costco is remaining firm on as the retailer is also keeping the price of its ever-so-popular hot dog and soda combo at $1.50, Axios reported.

“Let me just say the price when we introduced the hot dog-soda combo in the mid-1980s was $1.50 and the price today is $1.50,” Nelson said on Thursday’s call. “We have no plans to increase the price at this time.”

Costco’s commitment to keeping the price structure of the combo the same since it was introduced in 1985 has paid off. In the 2019 fiscal year, the company sold 151 million hot dog and soda combos for total sales of about $226.5 million, according to the Puget Sound Business Journal.

Costco has also kept its highly-demanded $4.99 rotisserie chickens at the same price, which Chief Financial Officer Rich Galanti said in a 2021 earnings call that the retailer had no plans to charge more for the poultry item despite “inflationary pressures” including “higher labor costs, higher freight costs, higher transportation demand, along with the container shortage and port delays,” according to Business Insider.

The rotisserie chickens still cost $4.99 in stores today.

As of Friday at 10:46 a.m. ET, shares of Costco were trading at $466.95, up $1.96 or 0.42%.