With no explanation from its president, prices are set to increase effective Oct. 17.
Walmart’s membership-based warehouse club, Sam’s Club (WMT) – Get Walmart Inc. Report recently reached out to all its members. The letter sent lets members know that the club has almost completed a refreshed look in all of its 600 locations. It also mentions the company has been working to improve its private-label brand Member’s Mark. The company additionally has made technology improvements to enhance shoppers’ experiences.
The wholesaler primarily focuses on value above all else. In a comparison, Sam’s Club is generally lower priced than its main competitor Costco (COST) – Get Costco Wholesale Corporation Report, but not by much. So, when it comes to saving every penny while shopping, Sam’s Club takes the prize. Costco’s focus is its members happiness, and isn’t always the lowest price, but is still a value compared to non-warehouse retailers.
As with any membership organization, Sam’s Club puts a lot of effort into getting members to renew each year. As a push to get members to sign up, Sam’s Club has run a promotion to have new memberships only cost $8, compared to the $45 for the basic membership. Over the pandemic years, the club has grown, and members benefited from the clubs discounted fuel prices during price hikes.
John Moore/Getty Images
Members Take a Hit, But Sam’s Eats It
Sam’s Club membership prices have been steady at $45 for the basic membership and $100 for Plus members. But on Oct. 17, Sam’s Club cardholders can brace themselves for a basic membership price increase to $50, and the Plus memberships will be $110. Sam’s Club CEO Kathryn McLay confirmed this was the first time “we’ve shifted the price of a Plus membership since it was introduced in 1999, and it’s been nine years since we last changed the price of our Club membership.”
McLay’s letter to current members let them know that for the first time in nine years, the wholesaler would be increasing its membership prices.
“We are mindful of the financial pressure on wallets right now,” McLay said in August. “So, this year’s renewal is on us. We’re giving back $5 in Sam’s Cash to Club members and $10 in Sam’s Cash to Plus members shortly after renewal.” McLay is referencing the price increase on renewals as a kick back to members for committing to another year of service.
Loyal returning members will be able to use their Sam’s Cash towards purchases, shortly after the renewing membership. The Sam’s Cash give-back deal to customers is going to run from Oct. 17 to Oct 16, 2023.
Other Memberships Will Pay for Price Increases
Sam’s Club members are paying more for memberships now, but others might be paying more soon. Costco CFO Richard Galanti left speculation on the table for a possible price increase. “Certainly, as we’ve increased members’ fees historically about every five, five and a half years, we’ve turned around and used it to drive more value,” he said.
“And whenever we do it, we’ll do that. I think at the end of the day, it’s — and I also want to point out, of course, if you look at the last three increases, on average, they were five years and seven months apart. If you look at June of ’17, plus five years and seven months, you’re talking roughly January ’23.” He continued, “Now I’m not suggesting it’s January ’23. I’m just saying it’s not there yet anyway. And our view is, is we are confident in our ability to do so. And at some point, we will, but it’s a question of when, not if,” he added.
Amazon Prime memberships also increased in 2022 from $119 to $139. The price hike is huge compared to Costco and to Sam’s Club.