Will Increased Membership Fees at Walmart's Sam's Club Actually Boost Costco's Stock Instead?

Costco Wholesale (NASDAQ: COST) made waves when it announced a price hike nearly two years ago, bringing the cost of a basic annual membership from $60 to $65. Now Walmart's (NASDAQ: WMT) Sam's Club, which competes with Costco's warehouse membership model, is raising its membership fee as well, from $50 to $60.

Is this a great development for Costco shareholders?

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Keeping up with Costco

Even though Walmart competes with Costco to some degree, since they're both discount retailers, Sam's Club has a similar membership model and is a more direct competitor. BJ's operates a similar model as well.

Sam's Club management said that it's "adjusted our membership pricing to support the things our members love," including better product assortment and expanded member hours. Costco cited similar ideas when it raised its membership fee, saying it would plow the money back into the business.

The membership model, by nature, attracts a more affluent clientele than Walmart, since it requires an annual fee, and it creates a more cohesive retail unit for Walmart, giving it exposure to more consumers.

Costco isn't actually much bigger than Sam's Club in terms of store count, with 637 U.S. stores versus around 600 for Sam's Club. And they both operate an international business.

It's difficult to compare their sales results, since Walmart only breaks down Sam's Club's U.S. business, and it reports Sam's Club international results as part of its international segment. In the 2026 fiscal fourth quarter (ended Jan. 31), sales in the U.S. business increased 2.9% year over year, while Costco's total sales increased 7.4% for the 2025 second fiscal quarter (ended Feb. 15). They both reported a 23% increase in e-commerce.

A reason to switch?

So, getting back to the original question, there's reason to think that higher membership fees could push Sam's Club members over to Costco's camp. For the past two years, a Sam's Club membership has been a full $15 lower than a Costco annual membership. Starting May 1, that will go down to $5. For the executive membership, the difference will be a more significant $10 -- $120 at Sam's Club versus $130 at Costco.

Since they have a similar number of locations in the U.S., happy members aren't likely to go anywhere. However, some members might be enticed to see what the competition looks like. Looking at it from the other direction, Costco members who might have switched to Sam's Club for its lower fee won't be as enticed to go anywhere. Altogether, it raises the bar for what all of these premium membership clubs can expect in terms of renewals and how they can shape their pricing, inclusive of the fee hikes.

The market may have already boosted Costco stock, which jumped after Sam's Club's news. But it's Costco's reliable performance, which was excellent in the March report, that makes it a great long-term bet.

Jennifer Saibil has positions in Walmart. The Motley Fool has positions in and recommends Costco Wholesale and Walmart. The Motley Fool has a disclosure policy.