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 dues this fall, as the warehouse club’s membership is at a record high and inflation-squeezed shoppers seek deals on bulk items.
Fees will increase to $50 from $45 for Club members and to $1[ads1]10 from $100 for higher-level, “Plus” members, which include some additional benefits. The changes come into force on 17 October.
It marks the first fee increase in nine years for the entry-level membership. Sam’s Club hasn’t raised the price of its “Plus” membership since it debuted in 1999.
That brings Sam’s closer in price to competitor Costco, which charges $60 a year for its basic membership and $120 for its higher-level “Gold” membership.
Sam’s Club increases annual fees as warehouse clubs take advantage of budget-conscious customers. Shoppers turned to Costco, BJ’s Wholesale and Sam’s Club during the first months of the Covid pandemic to stock up on huge packages of toilet paper, household cleaners and cans of soup. In recent months, these customers have sought relief from inflation by seeking cheaper gas and high volume discounts.
At the same time, inflation can make the increase sting. In a memo to members Wednesday afternoon, Sam’s Club CEO Kath McLay said the company is “aware of the financial pressure on wallets right now.”
With that in mind, she said, Sam’s Club will pick up the tab this year by refunding the fee increase in Sam’s Cash that can be used at its stores.
Investors have also speculated about a potential increase in Costco’s fees. The club last raised the fee in June 2017 and historically has increased it every 5½ years, which would put it on track for this year.
Costco CEO Craig Jelinek shrugged off talk of a raise on CNBC’s “Squawk on the Street” in July. “I can tell you that we think about it every year, but right now, as far as the membership fee, it’s not on the table right now,” he said. “I’ve made that very clear. 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 does not disclose membership numbers, but said in the latest quarter that it is at a record high. Membership revenue increased by 8.9% in the quarter ending 31 July.
Sales growth is outpacing other parts of Walmart’s business. Same-store sales at Sam’s Club rose 9.5% in the most recently reported quarter, compared to 6.5% at Walmart US
Chief Member and Marketing Officer Ciara Anfield said Sam’s Club decided to relocate because of investments it has made in recent years, from raising the quality of the items on the shelves to adding new and convenient ways to shop.
In recent years, it has added curbside pickup in stores, offered same-day home delivery, refreshed its Member’s Mark private label and launched Scan & Go, a smartphone app that people can use to call up items as they walk through the aisle. It has started carrying brands such as Eddie Bauer, La Mer and Banana Republic. And even some of the bakery treats have been given a gourmet spin, such as cinnamon rolls made with a French baking technique.
She compared the rollout of these new benefits to building a house or spending money on home improvement projects.
“There is an expectation that after you invest in this house, it will be worth more,” Anfield said. “We have made investments and we believe that our proposition, our membership, is now worth more.”