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

Walmart-owned Sam’s Club said Wednesday it will raise its annual fees this fall as warehouse club membership hovers at an all-time high and inflation-ridden shoppers seek bargains on bulk items.

The fees will increase to $50 from $45 for club members and to $110 from $100 for members of the higher “Plus” tier, which includes some additional perks. The changes come into effect on October 17.

This is the first entry-level membership fee increase in nine years. Sam’s Club has not raised the cost of a Plus membership since its debut in 1999.

This brings Sam closer in price to competitor Costco, which charges $60 a year for a basic membership and $120 for a higher “Gold” membership.

Sam’s Club is increasing annual fees as warehouse clubs benefit from budget conscious clients. Shoppers turned to Costco, BJ’s Wholesale Club and Sam’s Club in the early months of the Covid pandemic to stock up on huge packs of toilet paper, household cleaners and cans of soup. In recent months, these buyers have sought to get rid of inflation by looking for cheaper gas and big discounts.

At the same time, inflation can make the rise sting. In a note to members Wednesday afternoon, Sam’s Club CEO Kat Maclay said the company is “mindful of the financial pressure on wallets right now.”

With that in mind, she said, Sam’s Club will take charge this year by reimbursing the increased commission in Sam’s Cash, which can be used in its stores.

Investors also speculated about a potential increase in Costco fees. The club last raised its fee in June 2017 and has historically increased it every 5.5 years, allowing it to move forward this year.

Costco CEO Craig Jelinek backed off talk of more airings on CNBC’s July series Squawk on the Street. “I can tell you that we think about it every year, but now, in terms of membership dues, it is not discussed,” he said. “I made it clear. I don’t think now is the right time.”

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

Its sales growth is outpacing other Walmart businesses. Same-store Sam’s Club sales grew 9.5% in the most recent quarter reported, compared to 6.5% at Walmart US.

Chief Member and Chief Marketing Officer Ciara Enfield said Sam’s Club decided to make the move because of investments in recent years, from improving the quality of the items on their shelves to adding new and convenient ways to shop.

In recent years, the company has added in-store pickup, offered same-day home delivery, revamped its own Member’s Mark brand, and launched Scan & Go, a smartphone app that people can use to call stores while walking through the aisle. He began selling brands such as Eddie Bauer, La Mer and Banana Republic. And even some of his baked goods have become gourmet, such as cinnamon rolls made with French baking techniques.

She likened rolling out these new benefits to building a house or spending money on renovations.

“There is an expectation that once you invest in this house, it will be worth more,” Enfield said. “We have made an investment and we believe that our offer, our membership, is now worth more.”