Costco Wholesale Corp. is raising its membership fees 10 percent as the wholesale club operator tries to keep its prices on products low to keep drawing value-focused shoppers.
All retailers are struggling to balance soaring costs against shoppers' continuing demand for low prices.
Costco has hesitated to raise its prices, for fear of losing its appeal with consumers who are willing to pay a membership fee to get a good a deal on everything from milk to televisions. But that made it less profitable in its fiscal fourth quarter than analysts anticipated.
"That is the tightrope this company walks: keeping prices low and managing margins as well as possible to justify membership fee," said Matt Arnold, consumer staples analyst for Edward Jones.
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