Sam's Club is hiking its membership fees. Analysts suggest Costco and BJ's could be next.

By Bill Peters

The Walmart-owned warehouse club raised its fees as some analysts say higher gas prices could drive more shoppers toward membership retailers

Walmart's Sam's Club is raising membership fees for the first time since 2022.

The Walmart-owned Sam's Club this week became the latest chain to announce a membership-fee increase - a sign of strong demand for club retailers overall that analysts say could get even stronger as gas prices surge.

Mizuho analyst David Bellinger said in a note that more shoppers were turning to the U.S. warehouse-club segment - a $300 billion market - amid recent fluctuations in gas prices due to the Iran war. As those chains get more popular, more fee hikes are likely, he noted, and other analysts on Thursday said customers are likely to get used to them.

"We continue to see the club channel gaining traction - potentially more amid any prolonged gas price shocks - and this latest development points to clear pricing power within the annual membership fee," Bellinger wrote.

The move, he said, could raise fee income at Sam's Club by more than $200 million annually, and Walmart's (WMT) overall earnings per share by 2 cents a year.

Sam's Club and rivals Costco Wholesale (COST) and BJ's Wholesale Club Holdings (BJ) also have gas stations at their stores, and offer perks for fueling up there. As of Thursday, the national average gas price stood at around $4.08, according to AAA, up more than a dollar from a month ago.

Starting on May 1, the cost of a Sam's Club membership will increase to $60 a year, from $50 previously. The annual cost for its Plus membership will rise to $120 annually, from $110.

Costco raised its fees in 2024 - the first such increase in seven years - after months of badgering from Wall Street. BJ's raised its fees that year as well, also for the first time in seven years.

Shares of Walmart gained 0.8% on Thursday, to buck the weakness in the overall stock market. Costco shares were up 1.9% and BJ's stock gained 3.7%.

A Walmart representative told MarketWatch the membership-fee increase would allow Sam's Club to invest in new products, as well as its Member's Mark store brand. The increase would also help pay for things like extended store hours for members, and pickup and delivery options.

Shoppers over this decade have been squeezed by higher costs of living, while tariffs and geopolitical tensions over the past year have kept consumers cautious. However, Wall Street analysts have said that trend plays into the hands of bigger chains like Walmart and Costco, who can use their size and leverage with suppliers to keep prices lower.

The increase at Sam's Club marks its first since October 2022, Jefferies analyst Corey Tarlowe wrote in a research note Thursday. The analyst also noted that the fee hike is higher than previous increases and has arrived within a shorter time frame.

Tarlowe observed that the $10 fee hike compares to a $5 increase in 2022, marking "the largest nominal fee increase for basic members in recent history." He said that previously, Sam's Club tended to raise its membership fees every seven to nine years.

"While modest near-term renewal headwinds are possible, we view the increase as structurally positive for Sam's earnings power given high incremental margins on membership revenue," Tarlowe wrote. "We assume [Walmart] would not raise fees if renewal trends were at risk."

More broadly, Tarlowe believes the Sam's Club move could trigger higher fee levels across the category, and supports long-term revenue and profit assumptions for membership-based warehouse retailers.

-Bill Peters

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04-02-26 1830ET