Costco increases membership fees, Sam’s Club eliminates free shipping: 5 alternatives shoppers should try

Get ready to pay a little more at Costco. The big-box store club has announced a membership fee increase in the U.S. and Canada that will take effect September 1. Annual membership will increase by $5, from $60 to $65, while the Executive Membership level will increase by $10, from $120 to $130. Sam’s Club, meanwhile, has introduced a new, more expensive membership level that allows access during certain hours.

Given the numerous benefits these memberships bring, the potential savings might convince budget-conscious shoppers. But as exclusive shopping groups increase their fees, some are wondering if there are other options.

Fee increases for warehouse clubs

Costco announced a membership fee increase that will impact about 52 million memberships, with executive memberships making up just over half. The news was received positively, with shares rising about 2 percent in extended trading on Wednesday.

This increase is the first increase in Costco’s membership fees since June 2017. In the past, the company has raised fees about every five and a half years, suggesting the increase was expected in late 2022 or early 2023.

The company has waited until now to raise membership fees. In previous interviews with CNBC, CEO Brandon said it was not the right time because high inflation was hurting customers. Chief Financial Officer Richard Galanti repeated those comments in previous earnings reports.

The big-box store relies on membership fees as its main source of revenue, allowing it to offer goods at lower prices. Rival Sam’s Club raised its own membership fee in 2022 for the first time in nearly a decade.

Even after the increase, their membership remained cheaper: $50 annually for the basic membership and $110 for the premium “Plus” tier. Another competitor, BJ’s Wholesale Club memberships, cost $55 and $110 annually for the basic and premium tiers, respectively.

Last year, the big box store introduced stricter measures to ensure customers weren’t using other people’s memberships, including additional verification steps for memberships used at self-checkouts. These measures mirror recent moves by the streaming service, which has also tightened its policies to prevent unauthorized account sharing.

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

But with these membership fee increases, the big question is: What budget-friendly alternatives are there for shoppers? Here are the top 5 alternatives that may be easier on your wallet compared to Sam’s Club and Costco.

Top budget-friendly options compared to Sam’s Club and Costco

1) BJs Wholesale Club

• Year of foundation: 1984
• Locations: Eastern USA

BJ’s Wholesale Club is a strong competitor in the wholesale market, especially in the Eastern U.S. Like its competitors, BJ’s offers various products at discounted prices, including groceries, clothing, electronics, and more.

A BJ’s membership allows for savings on a variety of products, including groceries, paper goods, electronics, televisions and more. Many customers find the member discounts so great that they justify the membership fee. BJ’s offers both personal and business membership options:

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

2) Aldi

• Year of foundation: 1961
• Locations: Throughout the USA

Looking for a budget-friendly alternative to big-box stores like Sam’s Club? Aldi is a real game-changer. This discount grocery chain offers award-winning products at incredibly low prices.

This grocer offers award-winning products at low prices, from homewares to cleaning products and groceries. Aldi’s focus on own-brand products keeps costs low without compromising on quality, making it a popular destination for budget-conscious shoppers planning their weekly groceries.

Their focus on own-brand products keeps costs low for shoppers and makes them a favorite among price-conscious consumers who value good value over national brands.

3) Kroger

• Year of foundation: 1883
• Locations: Southern and western parts of the USA

Kroger is an attractive alternative for those looking for low prices like Sam’s Club but without the need for a membership. This supermarket chain offers competitive prices on various products, so no membership is required for bulk purchases.

Plus, Kroger offers not only groceries, but also a pharmacy with convenient services like vaccinations, clinic appointments, and prescription refills, so you can take care of your grocery list and healthcare needs in one place while enjoying budget-friendly prices.

4) Walmart

• Year of foundation: 1962
• Locations: Throughout the USA

While Sam’s Club is synonymous with bulk groceries, it offers a wider range of products, including electronics and home goods, which may lead some shoppers to consider Walmart as an alternative.

Unlike Sam’s Club, Walmart does not charge a membership fee. Still, the company has a reputation for offering competitive prices on a variety of goods, from cosmetics and pet supplies to groceries, electronics, clothing and home accessories.

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

5) Goal

• Year of foundation: 1962
• Locations: Throughout the USA

Are you looking for a balance between affordability and quality? Then Target might be just the thing for you. Like Walmart, Target eliminates the need for a membership fee and offers attractive prices on a wide range of products.

While Target has slightly higher prices than some options on this list, it makes up for it with an emphasis on quality and brand recognition. Additionally, at Target, you can 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 selection of clothing and home accessories, making it a one-stop shop for both basic and fashion-forward finds.

With so many options available, it’s easy to find the perfect solution for your shopping needs. Whether you’re looking for rock-bottom prices, quality products, or the convenience of a one-stop shop, there’s an alternative waiting to be discovered.