Sam’s Club members will have to pay a little more for their membership starting next month.
The Walmart-owned warehouse chain said Tuesday that it is raising the cost of its basic annual membership from $50 to $60, with Plus memberships increasing from $110 to $120.
The 20% hike for the basic tier comes less than four years after the company last raised prices for the option. It also raised prices in 2013.
“This update helps us continue delivering unbeatable value and exceptional shopping experiences while investing in an ever-expanding set of member benefits,” the company said.
As a perk for Plus members, Sam’s Club said it is raising its 2% rewards cap from $500 to $750 a year.
Mizuho retail analyst David Bellinger said in a note Wednesday that his firm estimates Sam’s Club has roughly 30 million paying members, which would translate into about $200 million in additional fee revenue for Walmart.
“We continue to see the club channel gaining traction — potentially more amid any prolonged gas price shocks,” Bellinger said. “This latest development points to clear pricing power within the annual membership fee.”
The Sam’s hike comes a year and a half after Costco raised the cost of its Gold Star membership from $60 to $65.
Club stores like Sam’s and Costco operate on a different business model than conventional retailers — one in which they sell merchandise at ultra-low markups and make their profits primarily from membership fees.
Several Business Insider price analyses have found that the savings from shifting annual purchases of gasoline and other key staples can easily offset the price of the clubs’ annual fees.
And Sam’s Club in particular has been investing heavily in new tech and services, including fast delivery and AI-powered exit gateways, that it says will boost the value of a membership.
Read the original article on Business Insider
The post Sam’s Club is hiking its membership fee to $60 — but it’s still less than Costco appeared first on Business Insider.
