Costco has raised membership fees for the first time in seven years.
The member-based department store announced Wednesday that the increase will take effect on September 1.
It’s the first increase since June 2017. The standard membership will increase by $5 per year, from $60 to $65 per year.
The Executive level, which offers 2 percent off all Costco purchases that year up to a total of $750, increases by $10 to $130 per year.
Many had expected rates to rise soon, as the retailer normally raises rates every six years or sooner.
Pictured is a Costco member holding a membership card. Costco has been charging between $60 and $120 per year for membership since June 2017
Costco said the increase will reach 52 million memberships, about half of which will be at the top end.
Shares rose two percent on the news as investors knew higher costs would mean higher profits.
At the old rates, the costs would generate more than $4 billion annually.
Until this latest increase, there had been seven membership fee increases since Costco’s founding in 1983 — each by $5. On average, they occurred once every five years.
The longest period in which the annual contribution remained unchanged was between 1983 and 1992.
According to inflation figures from the U.S. Bureau of Labor Statistics, the annual contribution was $25 in 1983 and would now be about $78.
After 1992, the periods between increases were about two and three years. Since 2006, they have been between five and six years. So the stretch so far is one of the largest.
Richard Galanti, who had been CFO since the early 1980s, left earlier this year.
In recent years, he had promised to keep membership steady as Americans struggled with rising costs and stagnant wages.
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Costco CFO Richard Galanti (pictured) told investors last year that the company would not raise annual membership fees in the near future
His replacement Gary Millerchip took over in March and was widely expected to raise prices.
While members may have benefited from lower dues, investors have long been waiting for a raise from management that would increase the company’s revenues.
In the three months ended Feb. 18, Costco generated $1.11 billion in membership fees, nearly 2 percent of total revenue for the quarter.
This means that Costco makes over $4 billion annually on these costs, a figure that is likely to increase as costs rise.