walmartThe Sam’s Club, owned by Sam, announced Wednesday that it will raise its annual fee this fall, as membership in the warehouse club hits an all-time high and inflation-ridden shoppers seek deals on bulk items.
Fees will increase from $45 to $50 for members of the club and from $100 to $110 for members of its top tier, “Plus,” which includes additional benefits. The changes come into effect on October 17.
This is the first fee increase in nine years for new members. Sam’s Club has not increased the price of “Plus” membership since its inception in 1999.
This brings Sam’s price closer to his rival Costcowhich charges $60 per year for its basic subscription and $120 for its top-tier “Gold” subscription.
Sam’s Club increases annual fees because warehouse clubs benefit from budget-conscious customers. Shoppers turned to Costco, BJ’s Wholesale and Sam’s Club during the early months of the Covid pandemic to stock up on huge packets of toilet paper, household cleaners and cans of soup. Over the past few months, these shoppers have sought relief from inflation by shopping for cheaper gas and high-volume discounts.
At the same time, inflation can cause the increase to sting. In a note to members on Wednesday afternoon, Sam’s Club CEO Kath McLay said the company was “aware of the financial pressure on wallets at this time.”
With that in mind, she said, Sam’s Club will foot the bill this year by refunding increased fees for Sam’s Cash that can be used in its stores.
Investors also speculated about a potential Costco fee hike. The club last increased its fee in June 2017 and has historically increased it every 5½ years, which would put it on track for this year.
Costco CEO Craig Jelinek backed out of talking about a raise to CNBC”scream in the streetin July. “I can tell you that we think about it every year, but right now, in terms of dues, it’s not on the table at the moment,” he said. been very clear. I don’t think it’s the right time.”
Sam’s Club has nearly 600 stores in the United States and Puerto Rico. It does not disclose its membership numbers, but said in the last quarter it was at an all-time high. Membership revenue increased 8.9% in the quarter ending July 31.
Its sales growth outpaces Walmart’s other business segments. Sam’s Club same-store sales increased 9.5% in the last quarter, compared to 6.5% at Walmart US
Chief Member and Marketing Director Ciara Anfield said Sam’s Club decided to make the move because of investments made in recent years, from improving the quality of merchandise on its shelves to adding new convenient ways to shop.
In recent years, it has added curbside pickup from stores, offered same-day home delivery, refreshed its Member’s Mark private label, and launched Scan&Go, a smartphone app people can use to calling out items as they cross the aisle. He started wearing brands such as Eddie Bauer, La Mer and Banana Republic. And even some of its pastries have taken on a gourmet twist, like cinnamon buns made using a French baking technique.
She likened rolling out these new benefits to building a house or investing in renovation projects.
“It is expected that after investing in this house it will be worth more,” Anfield said. “We have made investments and believe that our proposition, our membership is now worth more.”