Sam's Club, a division of Wal-Mart (WMT.US), announced on Wednesday that it will increase its annual U.S. membership fee by $10. Effective May 1st, the base annual membership for the warehouse club will rise to $60, while the premium "Plus" membership will cost $120 annually. Currently, a standard Sam's Club membership is $50 per year, and a Plus membership is $110. The last fee adjustment occurred in October 2022. Sam's Club stated that the price change is intended to "better meet member needs" and highlighted benefits such as an expanded product assortment, extended operating hours, and more convenient curbside pickup and delivery services. However, the new fees still remain below those of competitor Costco (COST.US), which charges $65 for a basic membership and $130 for an executive membership, following its own fee increase in 2024. After this increase, Sam's Club's fees will be on par with BJ's Wholesale Club (BJ.US), which also charges $60 for a basic membership and $120 for a premium membership. The membership fee hike comes as Sam's Club experiences growth in annual sales and membership numbers. According to Wal-Mart's fourth-quarter earnings report, Sam's Club's U.S. net sales grew approximately 3.1% in the last fiscal year, reaching $93 billion. This growth was partly driven by its expanding e-commerce business, with the warehouse club's online sales surging 23% year-over-year during the holiday season. Traffic to both physical stores and the website also increased, with transaction volume rising 5.3% in the same period. Rising gas prices, influenced by conflict in the Middle East, have made one of the warehouse club's key advantages—lower fuel costs—more prominent. According to data from the American Automobile Association (AAA), the national average gas price reached $4.018 per gallon this week, the highest level since the Russia-Ukraine war drove up energy prices in August 2022. Sam's Club does not publicly disclose its membership count but stated it reached a record high in the quarter ended January 31. Retail analyst David Bellinger from Mizuho Securities estimates the retailer has over 30 million members, with a rate of upgrades to the premium tier similar to Costco's. According to estimates from the equity research firm, the membership fee increase could boost Sam's Club's annual subscription revenue by more than $200 million, which would add 2 cents to the earnings per share of its parent company, Wal-Mart. The fee increase for existing members will take effect upon renewal at the end of their current billing cycle. Sam's Club stated that it notified members of the change via email on Tuesday. As part of the fee adjustment, Sam's Club also announced that its premium Plus members can now earn up to $750 annually in Sam's Cash rewards on qualifying purchases, an increase from the previous annual limit of $500.
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