5 Big Changes Costco Is Making This Fall and How They'll Affect You
One of the bigger items includes a potential increase in membership fees for the warehouse retailer.
For many long-time customers, the consistency of the shopping experience at Costco is part of what keeps them coming back. After all, the warehouse retailer has made headlines for its tireless devotion to keeping fan-favorite deals on food court items and rotisserie chickens going strong for decades—with no plans to update them. But like all businesses, some tweaks are necessary to help draw in new customers or manage the bottom line. Read on to learn about the changes Costco is making this fall and how they'll affect you.
The store is making non-menu changes to its food courts.
Just like free samples, the food court is arguably one of the softer spots that Costco fans have for the store. But while some menu items and their pricing have famously remained unchanged for decades, recent developments show that the eating area isn't immune to updates.
In a photo posted to Reddit last month, one shopper pointed out that their location appeared to have removed seating from its dining area, leaving only tall tables for guests.
"So with this horrendous setup, no children (or persons under 4 feet tall) are able to use the tables," the user wrote. "I had to prop one leg up on the crossbar and balance my toddler on my lap so she could eat her ice cream, not an easy task. Some families took to sitting on the floor along the back wall but were promptly shooed away by a manager."
While the store in question appears to be a warehouse in South Korea, other customers replied to the image with their own stories. One user in Montana added that their location had "added a few to the already existing tables. But they didn't take the seated ones away."
But the changes may not be as widespread as some shoppers realize.
However, food court fans may not have too much to worry about. According to Julie Ramhold, consumer analyst with DealNews.com, the limited number of locations likely means the internet uproar might've been premature.
"This is something that's going to vary wildly from location to location," she tells Best Life. "My local Costco still has the same seating arrangements it did before the pandemic, which just enforces that these stories are anecdotal."
Ramhold points out that locations that went to standing-only tables for a while would still likely bring back seats to ensure that more members are comfortable when dining in-club.
"While it's a good idea to provide constructive criticism when you can, there's no guarantee these kinds of decisions are the end-all-be-all," she says. "Odds are good that many will be temporary if you even see them at all."
Costco gave its website and online offerings a bit of an upgrade.
Even though most shoppers know Costco for its somewhat timeless warehouse shopping experience, the retailer still maintains an online shopping option filled with discounts of its own. But in a recent earnings call, Costco CFO Richard Galanti said the company had seen overall digital sales slip 0.8 percent compared to last year—including a 5 percent drop in big-ticket items like electronics, jewelry, and hardware.
But the store isn't taking the news lying down. Instead, the company appears to be sprucing up its online storefront.
"As I discussed during the last quarter earnings call, when I said that we were in the early innings of our digital mobile transformation efforts, progress is being made," Galanti said. "In terms of recent additions and upgrades, we've recently redesigned the account page and the digital membership card," as well as retooling the website's header to include a more prominent search bar.
And there have been other new features added. "We've recently, a few months ago, opened an optical digital store where you can virtually try on glasses and then order them for pickup, prescription glasses," he said during the call.
Some speculate the retailer benefits more from having customers shop in-store.
Even as the warehouse retailer shifts some of its focus online, some customers still speculate that the website might be a distant second priority. In a recent Reddit thread discussing Costco's online presence, some blamed an increasingly competitive marketplace.
"I don't believe their goal is to be an e-commerce powerhouse and ship single items," one user wrote. "Costco's strength is moving bulk pallets and minimal overhead, not shipping individual orders. Amazon has that covered."
Part of this could be the retailer's reliance on in-store marketing. "Costco still wants you in the warehouse for $5 chickens and picking up items you didn't think you needed until you saw them. That doesn't translate well online," the user speculated.
The retailer also updated its app to improve the shopping experience.
And it's not just Costco's website that has seen some fine-tuning. Shoppers may also notice their smartphones playing a more prominent role in their next warehouse trip, thanks to other soon-to-be-released upgrades.
"There are ongoing improvements in our Costco app, offering in-warehouse shopping tools to our customers such as a digital membership card, managing shopping lists, viewing warehouse savings, seeing the gas prices to the extent there's a gas station there," Galanti said during the earnings call.
He even hinted at another significant change: "And soon, you'll be able to search warehouse inventory and scan barcodes from the app."
The updates have already seen some appreciation from customers.
Even if the store is still planning to roll out more additions, it appears that some of Costco's digital refurbishments are already being well received by customers.
"With the improvements made thus far over the past year, our app store rating has gone from a dismal 2.3 stars to currently 4.7 stars," Galanti said. "Unique visitors to the site are up 40 percent year over year, and the Costco app installs are up 46 percent year over year. So, all in all, progress is being made."
Company leadership said a membership fee hike was likely on the way.
Costco stands apart from most other major retailers by charging its customers an annual membership fee to shop there. A regular Gold Star membership currently costs $60 per year, while an Executive Membership has run for $120 annually since the store's last price increase in 2017, the New York Post reports. But during the company's earning call, Galanti grabbed headlines when he announced that another price jump was a "question of when, not if."
When would this take effect? Similar to previous instances where the idea of hiking membership fees was discussed, the CFO danced around any concrete details.
"We can't really tell you if it's in our plans or not. We'll let you know when we know," he said. "We feel good, needless to say, about all the attributes of member loyalty and member growth…So, you know, stay tuned. We'll keep you posted. But there's not a whole lot I can tell you about that."
However, this is part of an ongoing saga.
It's not exactly a secret that the cost of everything seems to be rising lately. But experts say that even though Costco is in the news once again for this kind of hinted rollout, the truth is that it's no surprise.
"Membership programs will largely raise prices at some point in their lifespan, so it's something to be expected in general," Ramhold says. "However, [Galanti] has said multiple times that a rate increase will come at some point: There's just no definitive timeframe on when that'll happen."
"This has been a standard report from Costco during the last several earnings updates, so there's no reason to panic over an increase just yet," she tells Best Life.
The store is adding telehealth options for customers, including virtual check-ups.
Costco also offers services like travel insurance and cobranded credit cards. But last month, the retailer announced that it would begin offering its members in all 50 states access to virtual medical care thanks to a newly launched partnership with online healthcare marketplace Sesame.
"Quality, great value, and low price are what the Costco brand is known for," David Goldhill, co-founder and CEO of Sesame, said in a Sept. 25 press release announcing the move. "When it comes to health care, Sesame also delivers high quality and great value—and a low price that will be appreciated by Costco Members when it comes to their own care."
Thanks to the partnership, Costco members will have access to virtual primary care for just $29, health check-ups with a standard lab panel and follow-up for $72, and virtual mental health therapy for $79.
Other retailers are beginning to enter the telehealth market.
While the latest addition might seem like just another perk for paying Costco members, the warehouse retailer isn't the only company to dip its toe into the burgeoning field of remote healthcare. Competitors like Walmart already provide customers with in-store clinics, while Amazon offers on-demand remote access to third-party providers, CBS News reports. Because of this, experts see it as a potential move to hold onto devoted customers.
"Telehealth has been around for a while, but it definitely gained popularity and accessibility during the pandemic," says Ramhold. "The fact that Costco is getting on board by offering virtual visits for members at super reasonable prices is very encouraging to see."
She points out that even those with excellent benefits through their workplace may find that they lack in some areas such as mental health, making the idea of paying for an annual membership even more enticing.
"And as more and more young people lean into freelancing for the freedom to live and work where they want, options like this from Costco are a huge improvement over other options," Ramhold says.
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