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Walmart-owned Sam’s Club raises annual membership fee for the first time in 9 years

Walmart-owned Sam's Club raises annual membership fee for the first time in 9 years
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A sign hangs outside a Sam’s Club store on January 12, 2018 in Streamwood, Illinois.

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walmartSam’s Club, owned by Sam’s Club, said Wednesday it will raise its annual rates this fall as warehouse club membership remains at a record high and inflation-pressured shoppers seek deals on bulk items.

Rates will increase from $45 to $50 for club members and from $100 to $110 for members of its higher level, “Plus”, which includes some additional benefits. The changes take effect on October 1. 17

It marks the first rate increase in nine years for entry-level membership. Sam’s Club hasn’t raised the price of the “Plus” membership since it debuted in 1999.

That brings Sam’s price closer to the rival. Costcowhich charges $60 a year for its basic membership and $120 for its higher level “Gold” membership.

Sam’s Club is raising annual fees as warehouse clubs take advantage of budget-conscious customers. Shoppers turned to Costco, BJ’s Wholesale and Sam’s Club during the early months of the Covid pandemic to stock up on huge packages of toilet paper, household cleaning products and cans of soup. In recent months, those shoppers have sought relief from inflation by seeking cheaper gasoline and high-volume discounts.

At the same time, inflation can make the raise hurt. In a note 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, he said, Sam’s Club will foot the bill this year by repaying the increased fee in Sam’s Cash that can be used in its stores.

Investors have also speculated about a possible Costco fee hike. The club last raised its fee in June 2017 and has historically increased it every five and a half years, which would put it on track for this year.

Costco CEO Craig Jelinek got rid of talk of a raise on CNBC’s”squawking in the streetin July. “I can tell you that we think about it every year, but right now, in terms of the membership fee, it’s not on the table right now,” he said. “I’ve made that very clear.” be the right time.”

Sam’s Club has nearly 600 stores in the US and Puerto Rico. It does not disclose its membership, but said in the most recent quarter that it is at an all-time high. Membership revenue increased 8.9% in the quarter ended July 31.

Its sales growth is outpacing other parts of Walmart’s business. Same-store sales at Sam’s Club grew 9.5% in the latest reported quarter versus 6.5% at Walmart US.

Ciara Anfield, senior member and chief marketing officer, said Sam’s Club decided to make the switch because of the investments it has made in recent years, from raising the quality of merchandise on its shelves to adding new and convenient ways to shop.

In recent years, it has added curbside pickup at stores, offered same-day home delivery, revamped its private Member’s Mark brand, and launched Scan & Go, a smartphone app that people can use to check out items while on the go. They walk down the hall. He has started selling brands like Eddie Bauer, La Mer and Banana Republic. And even some of his bakery treats have been given a gourmet twist, like cinnamon rolls made with a French baking technique.

He compared launching those new perks to building a house or spending money on renovation projects.

“There is an expectation that after investing in this house, it will be worth more,” Anfield said. “We have made investments and we believe in our proposal, our membership is now worth more.”

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