In the US stock market today, Costco's stock price surged nearly 3% to 909.4 US dollars/share.

Since this year, Costco has surged more than 34%, far exceeding the S&P 500 index.

Most recently, Costco announced an increase in the basic membership fee from $60/year to $65/year, the first increase since 2017.

In June, Costco had net sales of $24.48 billion, up 7.4% year over year, and declared a quarterly cash dividend of $1.16 per share.

Unexpected price increase

On Wednesday, Costco said it will increase membership fees in the US and Canada by 8%, effective September 1. Meanwhile, Costco's premium membership fee will also increase from $120 to $130.

The move will affect around 52 million members, more than half of which are premium members.

This is Costco's first increase in membership fees since June 2017. Generally speaking, Costco increases membership fees every five years or so, and should have been raised at the end of 2022 or the beginning of 2023.

Earlier in an interview, Costco CEO Craig Jelinek said that now is not the right time because consumers are dealing with high inflation.

Other Costco executives also said that the price increase was only a matter of time, and the company's renewal rate, newly registered users, and customer loyalty were all very high.

In an earlier earnings call, they acknowledged that this round of price increases took longer than usual.

As a result, analysts have been watching the timing of price increases in recent quarters. Bloomberg analyst Jennifer Bartashus believes that this price increase was to be expected.

She believes that as consumers' concerns about inflation and economic prospects have abated, Costco has postponed price increases, and it is expected that the rate will remain stable after the price increase.

Intensify efforts to crack down on shared members

Costco relies on membership fees to drive most of its revenue and keep product prices low. Compared to competitors, Costco's membership fees are still a bit higher.

In 2022, Walmart's Sam's Club raised membership fees for the first time in nine years. After the increase, the regular membership fee is $50 per year, and the higher level membership fee is $110 per year.

At BJ's Wholesale, another storehouse supermarket in the US, regular members and higher level members cost $55 or $110 a year.

Additionally, Costco said it strengthened enforcement last year to ensure that shoppers don't use other members' cards.

The moves are reminiscent of streaming giant Netflix, which has also cracked down on users who don't pay to use its services.