A sign hangs outside a Sam’s Club store on January 12, 2018 in Streamwood, Illinois.
Scott Olson | Getty Images
Walmart-owned Sam’s Club said Wednesday it will raise its annual fee this fall, as warehouse club membership is at a record high and inflation-hit shoppers seek deals. buy in bulk.
Fees will increase to $50 from $45 for club members and to $110 from $100 for members at the higher tier, “Plus,” which includes some extra perks. The changes take effect on October 17.
It marks the first fee increase in nine years for entry-level membership. Sam’s Club hasn’t raised the price of “Plus” membership since it launched in 1999.
That brings Sam’s closer in price to the competition Costcocharges $60 a year for the basic membership and $120 for the higher tier “Gold” membership.
Sam’s Club is raising its annual fee because warehouse clubs benefit from budget-conscious customers. Shoppers turned to Costco, BJ’s Wholesale and Sam’s Club in the early months of the Covid pandemic to stock up on giant packs of toilet paper, household cleaners and soup cans. In recent months, these shoppers have sought to reduce inflation by seeking cheaper gas and bulk discounts.
At the same time, inflation can make increases stinging. In a note to members Wednesday afternoon, Sam’s Club CEO Kath McLay said the company is “mindful of the financial pressure on wallets right now.”
With that in mind, she said, Sam’s Club will move up the ranks this year by refunding the increased fee in Sam’s Cash that can be used at its stores.
Investors have also speculated on the possibility of Costco’s fee hike. The club last raised its fees in June 2017 and has historically increased its fees every five and a half years, which should put it on track this year.
Costco CEO Craig Jelinek declined talk about the increase on CNBC “Squawk on the street“in July.” I can tell you we think about it every year, but right now, in terms of membership fees, it’s not on the table right now,” he said. I said it very clearly. I don’t think it’s the right time. “
Sam’s Club has nearly 600 stores across the United States and in Puerto Rico. It did not disclose its membership count, but said in the most recent quarter that it was at an all-time high. Membership earnings grew 8.9% in the quarter ended July 31.
Its sales growth is outpacing other parts of Walmart’s business. Same-store sales at Sam’s Club grew 9.5% in the most recently reported quarter compared with 6.5% at Walmart US
Director of Marketing and Membership at Ciara Anfield said Sam’s Club decided to do so because of the investments it has made in recent years, from enhancing the quality of its shelves to the addition of new products. New and convenient way to shop.
In recent years, they’ve added curbside pickup in stores, offered same-day home delivery, rebranded Member’s Mark, and launched Scan & Go, an app. smartphones that people can use to order things as they cross the aisle. It has begun carrying brands such as Eddie Bauer, La Mer and Banana Republic. And even some of its treats have captured gourmet interest, such as cinnamon rolls made with French baking techniques.
She compares implementing those new perks to building a home or spending money on renovation projects.
“There is an expectation that after you invest in this home, it will be worth more,” said Anfield. “We’ve invested and we believe our offer, our membership is now worth more.”