CNBC reports that "Walmart-owned Sam’s Club said Wednesday it will raise its annual fees this fall, as the warehouse club’s membership hovers at a record high and inflation-pinched shoppers seek deals on bulk items. Fees will increase to $50 from $45 for club members and to $110 from $100 for members of its higher-tier level, 'Plus,' which includes some additional perks."
However, the story says, "Sam’s Club CEO Kath McLay said the company is 'mindful of the financial pressure on wallets right now.' With that in mind, she said, Sam’s Club will pick up the tab this year by reimbursing the fee increase in Sam’s Cash that can be used at its stores.
The increase takes effect on October 17, and "brings Sam’s closer in price to rival Costco, which charges $60 a year for its basic membership and $120 for its higher-tier 'Gold' membership." There has been speculation in the media and among analysts that Costco was planning a fee increase, but to this point CEO Craig Jellinek has said that this is not "the right time."
CNBC writes that "Chief Member and Marketing Officer Ciara Anfield said Sam’s Club decided to make the move because of investments in recent years, from elevating the quality of merchandise on its shelves to adding new and convenient ways to shop.
"In recent years, it has added curbside pickup at stores, offered same-day home delivery, refreshed its Member’s Mark private brand and launched Scan & Go, a smartphone app that people can use to ring up items as they walk through aisle. It has started carrying brands such as Eddie Bauer, La Mer and Banana Republic. And even some of its bakery treats have gotten a gourmet spin, such as cinnamon rolls made with a French baking technique."
Anfield tells CNBC, "We’ve made investments and we believe our proposition, our membership is now worth more."
- KC's View:
The Sam's Cash idea is one way of reducing the sting … but I'm still not sure the timing is right. Walmart can make all the arguments it wants about investments, but I'm not sure it will matter to stress-out shoppers. The bottom line - Walmart had the opportunity to give its Sam's Club members a win, and didn't.