The Record-Breaking Statistic Costco Just Reported

Inflation continues to hit record highs, per Statista. It's gotten so that for every dollar you might have spent one year ago, you'd have to spend more than $1.08 today, per the Consumer Price Index dated May 11, 2022. And that adds up, as you are likely aware. When it comes to food purchased for home consumption — i.e., groceries — you're looking at closer to $1.10. 

According to the U.S. Bureau of Labor Statistics, the Index as it relates specifically to food not purchased in a restaurant context, rose a whopping 9.4% over the last year. To put that in perspective, just consider that the last time anyone's had grocery store sticker shock like this was the year that His Royal Highness Prince Charles married Lady Diana Spencer and celebrity chef Ben Ford's dad, Harrison Ford, was killing it on the big screen with the first "Indiana Jones" movie.

Fortunately, if there's one thing you can count on to stay the same for the foreseeable future, it's the membership fee at Costco. As with the $4.99 price of Costco rotisserie chicken, which has not risen since 2017, Costco has no intention of raising its membership fees, which were last increased five years ago as well, according to Costco senior vice president of finance and investor relations Bob Nelson (via Grocery Dive). So, to what do consumers owe this gesture on the part of the warehouse grocery giant? It all comes back to this record-breaking statistic that Costco just reported.

Costco members appear to be a loyal bunch. According to Costco's Bob Nelson, addressing investors during Costco's most recent (Q3) earnings call, Costco's renewal rate for existing members was up 92.3% in the U.S. and Canada and 90% across the globe (via The Motley Fool). "In terms of renewal rates, we hit all-time highs," Nelson stated on the call, also calling out the record-breaking renewal rates for first-year members alone. 

Given the growing demand for Costco's shopping experience, one might wonder why Costco wouldn't take the opportunity to raise its fees — even slightly. After all, as TheStreet explains, Costco "operates on a membership model." In other words, a large portion of Costco's profits is driven by the sale of memberships, including renewals. 

Nevertheless, Costco appears unwilling to rock that boat at this time. In light of "historically high inflation, and the burden it's having on our members and all consumers in general, we think increasing our membership fee today ahead of our typical timing is not the right time," explained Nelson, who was sitting in for Costco's CEO during the earnings call, per The Motley Fool. That being said, Nelson did leave room for the possibility of an increase towards the end of 2022. 

"Historically, we've raised fees every five to six years, with the last three increases coming, on average, at about the five-and-a-half-year time frame," Nelson noted. And when was the last increase? June 2017.