These Costco Shakeups Could Cost You Money (But There Are Silver Linings)
As with many companies, Costco is making changes due to inflation. Although the company CEO Craig Jelinek announced in July that the company would keep its flagship $1.50 hot dog and soda deal, it is taking some cost-cutting measures.
Its food court chicken is going up by $1, FinanceBuzz reported, and fountain soda prices are increasing by 10 cents.
Costco gas prices rose along with other gas stations as the price of oil rose this summer. But the club still manages to keep prices roughly 37 cents per gallon cheaper than conventional gas stations, Barrons recently reported. In many states, these low gas prices were reserved only for members. But New Jersey clubs allowed anyone to take advantage of the savings. As of July, Costco’s New Jersey gas pumps are for members only.
Other services are also changing. Costco had previously offered an online mortgage marketplace accessible to anyone, with discounts to Costco members. In May, presumably in light of rising interest rates, the wholesale club discontinued the online comparison tool.
In a change that went into effect in April, Costco announced the end of its senior shopping hours — when older adults, shoppers with disabilities and those with weakened immune systems could shop between 8 a.m. and 9 a.m. for a less crowded shopping environment during the pandemic.
Now Here’s the Good News
There’s more good news than bad for Costco shoppers, though.
The company has announced new items in its stores, including the addition of plant-based beauty brand Boscia, Fitz and Floyd dinnerware and Disney-inspired art by Eric Dowdle as part of the Costco Next program. Costco Next gives members the opportunity to purchase up-and-coming products direct from Costco suppliers at members-only pricing.
Plus, Costco is adding new bakery items including chocolate cheesecake, raspberry mini cakes with buttercream frosting and possibly caramel flan, according to FinanceBuzz.
These delicious confections might inspire you to eat dessert first — unless dinner is sushi rolled fresh by Costco chefs. Not every location will serve sushi, according to FinanceBuzz, so you’ll have to stop by your local warehouse club to check availability.
Should You Get a Costco Membership?
Even with rising prices, the new services Costco is offering provide added benefits that could save you money. If you’re considering a Costco membership, now could be the time.
Costco execs have been discussing a membership price increase, as the company tends to increase fees every five or six years. The last time membership prices increased was 2017, when a Gold Star membership went from $55 to $60 and Executive members had to pay $120 instead of $110.
However, Robert Nelson, Costco senior vice president, Treasury, Financial Planning and Investor Relations, said on a recent earnings call, “Given the current macro environment, the historically high inflation, and the burden it’s having on our members and all consumers in general, we think increasing our membership fee today ahead of our typical timing is not the right time.”
Analysts like Michael Lasser of UBS, however, have said Costco membership hikes are “not a question of if, but a question of when.”
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