Photo by Gustavo Fring on Pexels. Shopping in a supermarket.
Imagine a household renewing its warehouse membership before making the next shopping list. The annual payment has gone up, but the basket may look much the same. For a retailer, that combination can produce faster fee growth without an equally large increase in customers. It is a hypothetical household, but a useful starting point for reading Costco’s latest accounts.
Costco (NASDAQ: COST)’s September sales update has brought another strong growth headline. Its annual results offer a different question: how much of the membership business’s progress comes from attracting more members, and how much comes from earning more from each membership? Those are both possible sources of growth. They carry different evidence requirements.
Fact: fees and membership counts grew at different speeds
Costco reported fiscal 2026 membership fees of $5.907 billion, versus $5.323 billion in 2025. Both years covered 52 weeks. The increase was $584 million, or 10.97%, calculated from its September 24 results release. These are recognised revenues, not the amount of cash collected at membership counters during the year.
Its 2026 Form 10-K shows year-end paid members rising from 81.0 million to 84.1 million, a calculated 3.83%. Executive members rose from 38.7 million to 42.3 million. Counts include a small proportion of expired memberships. Costco attributes fee growth to sign-ups, fee increases and Executive upgrades; the fee increase supplied approximately 30% of fiscal 2026 membership-income growth. Fees are recognised over the one-year membership period.
The two growth rates measure different things. One is income earned across a year; the other compares membership counts on two dates. Subtracting one percentage from the other would not produce a reliable measure of customer spending, pricing power or loyalty. A member joining near year-end contributes differently to annual revenue from one present throughout the year.
The higher price has a timetable
Costco’s membership-fee notice records the September 1, 2024 change from $60 to $65 for US Gold Star and Business membership, and from $120 to $130 for Executive membership. It also raised the maximum annual Executive 2% reward from $1,000 to $1,250. Those US dollar prices are not a worldwide average fee.
A fee change reaches customers as they join or renew. Accounting then spreads the revenue through the membership period. That creates a delay between changing the price on the membership page and seeing the full effect in annual income. The timing is especially relevant when a price change becomes part of a later year’s growth story.
Consider an explicitly simplified example unrelated to Costco’s reported totals. A club charges £60 for twelve months and records £5 of revenue a month. Raising that hypothetical fee to £66 makes the monthly amount £5.50 for a new annual membership. Collecting £66 upfront does not mean earning all £66 that day. This example ignores refunds and other complications; it illustrates timing rather than forecasting a retailer’s accounts.
Interpretation: the distinction makes fee growth more useful to analyse, not less valuable. A business can improve its economics through a higher price that customers accept. But a past price change is a different growth mechanism from a continuing flow of new members. Treating the two as interchangeable would make it harder to judge what could repeat.
An upgrade changes the relationship with the basket
An Executive upgrade also deserves a separate place in the explanation. It changes what a customer pays for membership and what the customer expects to receive. The reward is part of that exchange, rather than an incidental decoration on the higher fee.
For illustration, a hypothetical 2% reward on £1,000 of eligible annual purchases produces £20. On £3,000 it produces £60, before any cap. These are arithmetic examples, not Costco eligibility rules or recommendations about choosing a membership. They show why a more frequent shopper might assess a higher membership charge differently from an occasional shopper.
Interpretation: growth in an upgraded tier can indicate a closer connection between membership and shopping habit. It does not by itself establish that the upgrade caused additional purchases. Customers who already spend more may be more inclined to choose the tier. Separating that selection effect from changed behaviour would require customer-level evidence.
The practical analytical unit is therefore the membership relationship: the fee, the purchases that follow, the benefits supplied and the cost of maintaining that experience. A count of cards or a fee-income headline provides part of the picture. Neither supplies a complete customer-profit calculation.
Renewal is useful, but it looks backwards
Costco reports renewal of 92.3% in the US and Canada and 89.8% worldwide. Its trailing calculation captures renewals seven to eighteen months before the reporting date, excluding memberships expiring in the latest six months. That definition in the annual filing matters as much as the headline rate.
A trailing measure helps describe an established pattern. It is less suited to declaring that the newest group of customers has already accepted every change to price or service. Recent membership sales and mature renewal behaviour sit on different clocks.
Interpretation: the rate supports a case for an enduring customer relationship within the population measured. It cannot resolve every question about the newest memberships. The limitation is about the measurement window, not evidence that those newer customers will leave.
September’s bigger basket is a separate signal
In its October 7 release, Costco reported September net sales of $30.02 billion for the five weeks ended October 4, up 13.0%. Company comparable sales rose 11.4%, or 7.6% excluding gasoline-price and foreign-exchange effects. Costco also said the later Labor Day boosted total and comparable sales by a little more than half a percentage point.
Comparable sales examine an established operating base; total sales can also reflect expansion. Removing gasoline-price and currency effects answers a narrower question about growth. Neither adjustment removes every possible influence on the shopping basket, and neither turns a monthly sales release into a membership profitability report.
This matters because a strong monthly headline can easily be asked to do too much. It adds evidence of sales activity after the fiscal year ended. It does not update the annual membership count, reveal the profit on each repeat customer or explain how much of the next year’s fee growth will come from pricing.
Who could benefit?
Fact. Costco has the direct exposure: its annual filing attributes membership-income growth to sign-ups, fee increases and Executive upgrades. Interpretation. More recognised fees can support its economics if the shopping experience keeps households renewing without an offsetting rise in the cost of serving them. The relevant horizon is successive annual membership periods. Fee income is not a standalone profit figure; rewards, merchandise margins and operating costs still matter.
Fact. BJ’s Wholesale Club Holdings (NYSE: BJ) sells annual club memberships and names Costco and Sam’s Club as warehouse-club competitors in its annual filing. Walmart (NASDAQ: WMT) owns the Sam’s Club business; its annual report identifies membership income as a significant component of Sam’s Club U.S. operating income. Sam’s Club has no separate public-company symbol.
Speculation. If households reconsider where a membership earns its place in the shopping budget, BJ’s or Sam’s Club could attract additional members and repeat baskets. That requires a convenient location and a convincing combination of price, range and service, followed by renewal. Neither filing establishes that Costco’s fee increase has caused switching. The test would run over recruitment and renewal cycles, rather than one sales month. BJ’s is a direct club operator; Sam’s Club is one part of Walmart, so a club-level gain would not automatically be material to the whole group.
Who’s at risk?
Interpretation. Costco faces the risk that the renewal charge rises faster than the value a household sees in its visits. The existing trailing renewal measure cannot settle the newest members’ response. Evidence of weakening comparable renewals or repeat spending would make that concern more concrete; slower fee growth as a past price change fades would not establish it on its own.
Interpretation. BJ’s and Walmart’s Sam’s Club face the other side of the same competition. Winning a basket through discounts, rewards or service spending helps only if the membership relationship covers those costs over time. Speculation. If households consolidate shopping at another club, either could lose visits or renewals; if they offer more to retain members, costs could absorb some extra receipts. These are conditional mechanisms over coming membership cycles, not observed losses attributed to Costco. Consistently defined membership income, retention and operating results would be needed to assess the effect. The sources do not quantify this scenario’s contribution to any issuer’s earnings, and these business risks imply no share-price forecast.
Speculation: what could sustain the next stage?
More memberships, more upgrades and continued renewals could support further fee growth. That is a conditional scenario, not a projection. Another possibility is that fee growth moderates as the contribution from an earlier price change fades, even while the membership business remains healthy. The available figures do not assign probabilities to either path.
The next useful evidence would keep the definitions consistent: comparable paid-member counts, the contribution of pricing to fee growth, upgraded-tier participation and renewal rates with their observation windows. Customer-level retention and costs would strengthen the assessment further, but this article does not estimate undisclosed unit economics.
The current evidence supports growth in both the membership base and the income earned from it. Judging the durability requires following each mechanism separately. A household sees one renewal charge before its next basket; an analyst needs to keep the price, the timing and the repeat relationship in view.
Sources checked 12 October 2026. This article provides financial information and editorial analysis, without a recommendation to trade any security.