A Costco membership price hike is coming soon, analyst says
Shoppers, this might be the perfect time to sign up for a Costco membership.
According to Michael Lasser of UBS US Hardline & Broadline and Food Retail, the corporation likely sees
the current period as "an excellent time to charge a little bit more for the members since we're offering so much value to them" (see video above).
With a $575.00 price objective on Costco's shares, UBS has a Buy rating.
Lasser predicted that the plan will be announced later in the spring and put into effect in the first half of the summer.
What they discover is that they take a percentage of the profit injection from this fee—which is essentially pure profit—and reinvest it back in cheaper prices.
The model is aided by this as well. It aids in setting Costco apart from competing businesses."
Last quarter, same-store sales at Costco increased 6.8%, mostly as a result of customer changes away from discretionary products
and towards necessities like fresh foods. Costco also reported that 92% of its U.S. members were renewing their memberships.
Last quarter's revenue from membership fees increased by 6.2% year over year to $1.03 billion.