Insight Flash: CE data explores how Costco’s tougher membership policy may affect growth long-term.

Will cracking down on non-member purchasing cost Costco sales dollars? When Netflix said it was putting an end to membership sharing, subscriptions soared. But subscriptions were Netflix’s primary source of revenue and sharers were true free riders – Costco has a lot to lose if membership piggybackers take their club dollars elsewhere. The company took an especially big risk announcing a tougher policy right before the Fourth of July holiday when many shoppers turn to club stores to buy in bulk for barbecues and beach parties. 

The risk seemed to have paid off. Although y/y ex-fuel growth in the week before Fourth of July decelerated slightly for Costco in 2023 versus the two years prior, both of those years represented pandemic recovery and Costco’s 2023 high-teens growth substantially outperformed Warehouse Clubs as a whole. With a retailer relying on subscription sharers for some of its sales seeing success, the crackdown may continue across other verticals. Whose Prime account are you using?

Consumer Edge is the leading provider of alternative data for consumer spending behavior, and the only provider of global revenue signals. If you’d like to benefit from using Transact US or other products leveraging industry data year-round to track trends and dynamics like these, reach out to insights@consumeredge.com.

Stacie Rabinowitz is the VP of Product Research at Consumer Edge. Explore more of her insights here and follow her on LinkedIn.