Costco Hikes Membership Fee, Sam's Club Cuts Free Deliveries: 5 Alternatives For Shoppers To Check Out

Get ready to pay a bit more at Costco. The warehouse club announced a membership fee increase in the US and Canada, effective September 1. Annual memberships will jump by $5, rising from $60 to $65, while the "Executive Membership" tier will see a $10 hike, increasing from $120 to $130. Meanwhile, Sam's Club has introduced a new, pricier membership tier that offers access during specific hours.

With the array of benefits that come with these memberships, the potential savings could reassure budget-conscious shoppers. However, with exclusive membership shopping groups raising their fees, some are starting to wonder if there are other options available.

Warehouse Club Fee Increases

Costco announced membership fee increases that will impact roughly 52 million memberships, with executive memberships making up slightly more than half. The news was met positively, with shares rising about 2 percent in extended trading Wednesday.

This hike marks Costco's first membership fee increase since June 2017. Historically, the company has raised rates about every five and a half years, suggesting the increase was expected in late 2022 or early 2023.

The company has waited to raise membership fees until now. In past interviews with CNBC, the CEO, Brandon, said it wasn't the right moment because high inflation was hurting customers. The finance chief, Richard Galanti, echoed these comments during previous earnings reports.

The warehouse store relies on membership fees as its main income source, allowing it to offer lower prices on merchandise. Their competitor, Sam's Club, increased its own membership fee in 2022 for the first time in nearly a decade.

Even after the increase, their membership remained cheaper, at $50 annually for basic memberships and $110 for their premium tier, called "Plus." Another competitor, BJ's Wholesale Club memberships, costs $55 and $110 annually for their basic and premium tiers, respectively.

Last year, the warehouse store implemented stricter enforcement to ensure customers weren't using memberships belonging to others. This included additional verification steps for memberships used at self-checkout kiosks. These actions mirror recent moves by the streaming service, which has also tightened its policies to prevent unauthorised account sharing.

However, Sam's Club's premium tier is facing criticism for its new $50 minimum for free shipping, leading to comparisons with Costco and threats from members considering switching memberships. Sam's Club announced via email a change to its premium membership benefits. Starting August 19, free shipping on online orders will only be available for qualifying purchases of $50 or more.

But with these membership fee increases, a big question arises: what are some budget-friendly alternatives for shoppers to consider? Here are the top 5 alternatives to explore that might be easier on your wallet compared to Sam's Club and Costco.

Top Budget-Friendly Options Compared To Sam's Club And Costco

1) BJ's Wholesale Club

• Year founded: 1984
• Locations: Eastern portion of the US

BJ's Wholesale Club is a strong contender in the warehouse club market, particularly in the Eastern United States. Like its competitors, BJ's offers various products at discounted prices, including groceries, clothing, electronics, and more.

A BJ's membership unlocks savings on various products, including groceries, paper goods, electronics, TVs, and more. Many customers find the member-only discounts significant enough to justify the membership fee. BJ's offers both personal and business membership options:

The Club Card Membership ($55 annually)
The Club+ Card Membership ($110 annually)

2) Aldi

• Year founded: 1961
• Locations: Throughout the US

Looking for a budget-friendly alternative to warehouse clubs like Sam's Club? Aldi is a game-changer. This discount grocery chain boasts award-winning products at incredibly low prices.

This grocer offers award-winning products at low prices, encompassing everything from household essentials to cleaning supplies and food items. Aldi's focus on private-label brands keeps costs down without compromising quality, making it a popular destination for budget-conscious shoppers who plan their weekly hauls.

Their focus on private-label products keeps costs down for shoppers, making them a favourite among price-conscious consumers who prioritise value over national brands.

3) Kroger

• Year founded: 1883
• Locations: Southern and western portions of the US

Kroger is a compelling alternative for those seeking Sam's Club-like affordability without the membership commitment. This supermarket chain offers competitive prices on various products, eliminating the need for a bulk-buying membership.

Moreover, Kroger goes beyond groceries, offering a pharmacy with convenient services like vaccinations, clinic appointments, and prescription refills. So, you can tackle your grocery list and healthcare needs in one stop, all while enjoying budget-friendly prices.

4) Walmart

• Year founded: 1962
• Locations: Throughout the US

While Sam's Club might be synonymous with bulk groceries, it offers a wider range of products, including electronics and home goods. This can lead some shoppers to consider Walmart as an alternative.

Unlike Sam's Club, Walmart doesn't require a membership fee. Yet, it maintains a reputation for offering competitive prices on various goods, from cosmetics and pet supplies to groceries, electronics, clothing, and home décor.

This makes Walmart a convenient one-stop shop for various household needs at budget-friendly prices. Beyond that, Walmart recently announced significant pay increases for store managers, with some potentially earning up to $530,000 annually. This investment in their workforce might reflect their commitment to maintaining competitive prices for customers.

5) Target

• Year founded: 1962
• Locations: Throughout the US

Looking for a balance between affordability and quality? Target might be your perfect match. Like Walmart, Target eliminates the need for a membership fee while offering attractive prices on a wide range of products.

While Target may have slightly higher prices than some options on this list, it compensates with a focus on quality and brand recognition. Furthermore, Target allows you to avoid bulk purchases that are common at wholesale clubs.

This flexibility can lead to long-term savings, especially if you only buy what you need. Plus, Target is known for its trendy clothing and home décor selections, making it a one-stop shop for both essentials and style finds.

With so many options available, finding the perfect fit for your shopping needs is within reach. Whether you prioritise rock-bottom prices, quality products, or the convenience of a one-stop shop, there's an alternative out there waiting to be discovered.