Costco (COST) members are apparently so obsessed with shopping at the place that they are willing to pay even more for the privilege of buying bulk mustard.
At 60%, more than half of those polled in a new Barclays survey said that Costco's recent fee increase will not make them less likely to renew. Of the 40% that indicated that they are "less likely to renew", Barclays notes that this does not mean they will not renew.
In March, the wholesale retailer said it would hike the price of its Goldstar membership by $5 per year to $60. Executive membership fees will increase by $10 to $120. The new fee increases will go into effect June 1, 2017, and will impact nearly 35 million members. Costco enters its fee increase with some wind at its sails. Same-store sales in April increased 3 percent when excluding volatile gas prices and currency. Sales in the U.S. rose 3 percent.
Barclays commissioned Research Now, an online market research company, to conduct a survey of Costco shoppers. The survey was conducted from April 13 through April 18. A total of 600 qualified responses were recorded that represent a broad sample across age cohorts, income demographics, and geographies.
Interestingly, Costco members said they would be willing to pay even more (see chart above) to shop at the enormous warehouses. But either way, Costco will rake in some serious dough from its latest fee hike. Morgan Stanley estimates Costco will see an extra $265 million of EBIT [earnings before interest and taxes] over two years, which represents about 40 cents to earnings per share.
Editor's Pick: Originally published April 21.
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Editors' pick: Originally published May 4.