Memberships in Costco Wholesale’s loyalty program jumped during the company’s fiscal fourth quarter. At the end of the quarter, executive memberships reached 16.1 million, which represents an increase of about 400,000 members since the end of the third quarter (roughly, a 25,000-per-week increase in the quarter.)
In terms of members at the end of the fiscal year, Costco had 34 million gold star members, up from the most recent quarter of 33.2 million. Including additional cards, total card holders totaled 81.3 million, up from 79.6 million compared to the fourth quarter last year.
Richard Galanti, EVP and Chief Financial Officer, Costco Wholesale was asked during a Q&A session after the Sept. 30 fourth-quarter earnings conference call about increased fees associated with the company’s loyalty program.
“I think we’ve done $6, $5 increases over roughly 30 years, generally about every five or so years,” Galanti said, according to Seeking Alpha. “We don’t do a lot of polling. We look at it internally. We have we improved the value of that membership to our member. In terms of the tolerability of it to the member, I know, our historical five in the case of the executive member last time five years ago $10 increase is a heck of a lot less than we see in other types of fees out there, be it fees for television, or your phones, or other services out there. So I firstly don’t think it’s going to ever be an issue. I think what surprises me personally is the continued penetration of that area. And maybe we’ve gotten a little better in-store of doing that. Clearly, loyalty programs are worth it, whether it’s our executive member program or a reward-based program credit card. We feel that we can continue, even on our co-brand card, to improve the value proposition to our member, which hopefully gets them in here more often. But that’s what we do every day. Our main focus is on driving value.”