How Costco, grocery membership fee hikes impact consumer buying decisions

Raising membership fees can generally be chalked up as "the price of doing business." But as inflation, demand and supply chain issues continue to dictate an increase in prices, consumers are left to consider the value of using services like grocery deliveries and big-box retailers.

Retail analyst and financial expert Hitha Herzog shared her insights with “GMA” on increases in membership fees as well as how individual lifestyle is a key driving factor for cost-benefit analysis.

"It always leads back to the consumer, because the consumer will have to eat the cost somehow," Herzog explained. "It's in the form of membership prices."

Amazon recently announced a price hike for its membership to Prime services, which includes discounts for Whole Foods and grocery deliveries, due to "the continued expansion of Prime member benefits as well as the rise in wages and transportation costs."

"We're going to start seeing more and more of these memberships to retailers, especially larger online retailers -- go up in price as well -- if you're going to increase the number of goods sold on the site and what you offer to your customers, you're going to have to cover those overhead costs."

Guggenheim analyst John Heinbockel predicted in a new research note earlier this week that popular big box retailer Costco is close to increasing its annual membership fees.

"We believe we are now 8 to 9 months away from a likely membership fee increase, a historical catalyst for the shares. As is well known, Costco has increased its annual membership fee every five and a half years by $5 to 10. On this timetable, the next hike would come in August-September 2022."

Herzog explained that bulk stores like Costco increase their membership price cyclicly "about every five and a half years."

Costco has bifurcated membership options, Gold Star and Executive, the first costs $60 a year and the latter $120 a year, currently.

"I think the crux of this is that this is something typical of these bulk stores. The fact that they're only doing it every five and a half years -- as opposed to other stores or services that are increasing the price of products because of inflation," Herzog said. "So I think this price increase is already baked into their business model we already knew that this was coming."

According to Heinbockel's analysis, he predicts the Gold Star fee would go to $65 while the Executive membership would move to $130. The warehouse retailer's increased fee could potentially help keep overall product cost down for members amid labor shortages, supply chain issues and inflation.

Costco did not immediately respond to "Good Morning America's" request for comment.

How should consumers weigh the value of pricier memberships?

"I think it really you have to examine your life, a little bit," Herzog said. "What I mean by that is you have to assess, what is going to cost you less? So if you are seeing an increase in product [prices], which we're definitely seeing across the board with everything from staple items in your refrigerator to the price of gasoline -- Is it worth it to you to spend more on gasoline to drive to a store to try to get a cheaper product? Or is it worth it for you to spend a little more on a membership to potentially get free delivery, so you can spend a little more on the product?"

She continued, "Overall, consumers are going to have to pay for the price increase due to inflation and due to supply chain issues still existing."

"As much as we hear government officials saying, 'it won't impact the consumer ... manufacturers are going to eat the cost,' it's never the case," she said. "At some point, the consumer is going to have to pay."