Sam raises the US membership fee by $10, expected to increase Walmart (WMT.US) earnings by 2 cents per share.

Zhitong Finance APP learned that on Wednesday, Sam’s Club, a unit of Walmart (WMT.US), announced it will raise its U.S. annual membership fees by $10. Effective May 1, the basic membership annual fee for this warehouse-style club will increase to $60, while the premium membership, called “Plus,” will rise to $120. Currently, Sam’s Club membership annual fees are $50, and Plus members’ annual fees are $110. The last time the club adjusted its fees was in October 2022.

In a statement, Sam’s Club said it is adjusting membership prices to “better meet members’ needs,” and listed numerous benefits, including a wider variety of merchandise, extended operating hours, and more convenient curbside pickup and delivery services.

However, the new membership fees are still lower than those of the competitor Costco (COST.US), whose basic membership annual fee is $65 and premium membership annual fee is $130. Costco raised its membership fees in 2024. After this increase, Sam’s Club membership fees will be on par with BJ’s Wholesale Club (BJ.US), whose basic membership annual fee is $60, and premium membership annual fee is $120.

With growth in annual sales and the number of members, Sam’s Club has also increased its membership fees. According to Walmart’s fourth-quarter earnings report, Sam’s Club’s net sales in the U.S. grew by about 3.1% in the prior fiscal year, reaching $93 billion. Part of this growth was driven by its expanding online business: during the holiday season, the warehouse-style club’s e-commerce sales rose 23% year over year. Foot traffic to physical stores and websites also increased, with transactions up 5.3% year over year in the same period.

Driven by the Iran war, oil prices have risen, making another key advantage of warehouse-style clubs even more noticeable—lower spending on lower gas prices. According to the American Automobile Association (AAA), the average gas price across the U.S. this week reached $4.018 per gallon, the highest level since August 2022, when the Russia-Ukraine war pushed up energy prices.

Sam’s Club has not disclosed its membership numbers, but said that in the three months ended January 31, its membership count hit a record high. Mizuho Securities retail analyst David Bellinger estimates that the retailer has more than 30 million members, and the proportion of members choosing to upgrade to a higher-tier membership is similar to that of Costco. Based on this stock research firm’s estimate, the increase in membership fees may boost Sam’s Club’s annual subscription revenue by more than $200 million, which would increase Walmart’s earnings per share by 2 cents.

The fee increases for existing members will take effect when they renew at the end of their billing cycle. Sam’s Club said it notified members of the fee increase via email on Tuesday. As part of the fee adjustment, Sam’s Club said that its higher-tier members can receive up to $750 in Sam’s Cash rewards per year on eligible purchases, up from the previous $500 per year.