Walmart’s membership-based warehouse club, Sam’s Club (WMT) recently reached out to all of its members. The letter sent lets members know that the club has nearly completed a refreshed look across all of its 600 locations. He also mentions that the company has been working to improve its Member’s Mark private label. The company has also made technological improvements to improve the experience of shoppers.
The wholesaler mainly focuses on value first. In comparison, Sam’s Club is generally cheaper than its main competitor Costco (COST) , but not by much. So when it comes to saving every penny when shopping, Sam’s Club wins the prize. Costco’s goal is member happiness, and it’s not always the lowest price, but it’s 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. To entice members to sign up, Sam’s Club ran a promotion so that new memberships cost only $8, compared to $45 for the basic membership. During the pandemic years, the club grew and members benefited from reduced club fuel prices during price increases.
Members take a hit, but Sam eats it
Prices for Sam’s Club memberships held steady at $45 for the basic membership and $100 for Plus members. But on October 17, Sam’s Club cardholders can prepare for a price increase for the Basic membership to $50, and Plus memberships will be $110. Sam’s Club CEO Kathryn McLay confirmed it was the first time “we have changed the price of a Plus Membership since it was introduced in 1999, and it has been nine years since we 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 raise its membership prices.
“We are aware of the financial pressure on portfolios at this time,” McLay said in August. “So this year’s renewal is for us. We give out $5 in Sam’s Cash to Club members and $10 in Sam’s Cash to Plus members shortly after renewal. McLay refers to the price increase on renewals as a nudge for members to commit to another year of service.
Returning loyal members will be able to use their Sam’s Cash to make purchases shortly after membership renews. Sam’s Cash cashback offer to customers will run from October 17 to October 16, 2023.
Other subscriptions will pay price increases
Sam’s Club members pay more for memberships now, but others may pay more soon. Costco Chief Financial Officer Richard Galanti has left speculation on the table for a possible price increase. “Certainly, as we have historically increased membership dues about every five, five and a half years, we have turned around and used that to generate more value,” he said.
“And every time we do it, we will. 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 2017, plus five years and seven months, you’re pretty much talking about January 23. He continued, “Now I’m not saying it’s January 23. I’m just saying it’s not there yet anyway. And our view is that we are confident in our ability to do so. And at some point we will, but it’s a matter of when, not if.”
Amazon Prime subscriptions also increased in 2022, from $119 to $139. The price hike is huge compared to Costco and Sam’s Club.