Costco's Fees Are Going Up, But the Price of This Fan Favorite Is Safe
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It's the news no one wanted to hear -- at least in the context of Costco. The warehouse club giant just announced that it will be raising the cost of its memberships starting Sept. 1.Right now, a Gold Star membership costs $60 a year, while an Executive membership costs $120. Come September, these prices will increase to $65 and $130, respectively.Of course, given that it's been seven years since Costco raised the cost of its memberships, it's a little hard to get overly upset about a late-2024 increase. But at a time when things are so darn expensive, any cost increase is apt to sting.The good news, though, is that while you might pay a bit more to keep your Costco membership starting in September, the cost of one fan favorite is staying put.Your favorite food court meal is safeCostco's $1.50 hot dog and soda combo was introduced in 1985. And since then, that price point has held steady.Now you may be thinking, "Well, if Costco can raise the cost of a membership, it can also raise the cost of my beloved combo." But a price increase for the hot dog meal is unlikely for a couple of reasons.First, the hot dog and soda combo is a deal Costco offers as a means of retaining customers. Costco could easily charge twice as much for that combo, and it would still be a great deal. The reason it's kept the original price from 1985 is that it's a marketing gimmick -- pure and simple.But the backlash that might ensue from an increase in the hot dog combo is something Costco most likely does not want to deal with. In fact, it's fair to say that fans would probably react more strongly to an increase in the cost of the hot dog meal than an increase in membership fees. So that's probably not a risk Costco wants to take.Also, during the company's most recent earnings call, CFO Gary Millerchip expressly said, "I also want to confirm the $1.50 hot dog price is safe."It's unlikely that Costco would then change its tune just a couple of months later. It's also unlikely that Costco would unleash a double whammy on its customers by raising the cost of memberships and the hot dog and soda combo at the same time.Why you shouldn't sweat a Costco fee hikeIt's never a fun thing to see any expense of yours go up. But it's also important to put Costco's fee hikes in perspective.If you have a basic membership, you're looking at paying $0.42 more per month after the increase. If you're an Executive member, on a monthly basis, you're forking over an extra $0.83. These aren't life-changing amounts, and the money your Costco membership saves you might more than make up the difference.In fact, if you replace a single restaurant or deli lunch with a hot dog and soda combo from Costco, you might easily make up the $5 or $10 extra you'll soon have to spend on a membership. So try not to get too bummed about having to pay more to shop at Costco -- especially since you can still get the cheapest meal in town at an unbeatable price.Top credit card to use at Costco (and everywhere else!)
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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
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