Will Costco Raise Grocery Prices in 2024?

One of the benefits of shopping at Costco is getting to save money on everything from electronics to apparel to household essentials. And a lot of people shop at Costco to spend less money on groceries.

But will grocery prices at Costco hold steady in the new year? Or should shoppers brace for an increase?

Food prices may rise in general

Costco doesn't operate in a bubble. So when food prices are up in general, Costco tends to raise its prices, too.

Meanwhile, The USDA anticipates a 2.9% increase in food prices in 2024. So based on that factor alone, it may be reasonable to assume that grocery prices at Costco are going to rise modestly the same way they might at just about any store.

That said, you may not see as steep an increase in Costco's grocery prices as you might at the supermarket. Why so?

Unlike supermarkets and big-box stores, Costco shopping isn't just open to everyone. Rather, you have to pay a membership fee to be able to walk in the door.

Meanwhile, Costco hasn't raised the cost of its membership fees since June 2017. Given that lengthy stretch, it's possible that Costco will opt to raise membership fees in 2024.

If that happens, Costco might be able to use the revenue it collects in membership fees to offset the cost of procuring inventory, groceries included. And if so, then we may not see such a notable uptick in the cost of groceries at Costco.

Buying in bulk can save you money -- if you do it right

While the cost of groceries at Costco may rise in the new year, the silver lining is that you could save a nice amount of money on your food bills in general by buying the right products in bulk. But this requires a bit of strategy, because if you overbuy in bulk and end up having to throw food away, you'll be wasting your money rather than saving it.

The primary question to ask yourself before buying any given Costco item in bulk is whether it's already an established staple in your household. You may be inclined to start buying berries in bulk if prices go up in 2024. But if your kids only eat berries sparingly, that's not necessarily the wisest choice.

Also, don't forget that while some bulk purchases may not make sense for your household alone, it could make financial sense to split a bulk haul with a neighbor or friends. So going back to our example, perhaps a bulk pack of strawberries is $5 at Costco but you only expect to eat half of it -- only half that amount is $4 at the regular supermarket. Finding a neighbor to split the bulk pack with may be a good solution.

All told, you may want to gear up for higher food costs in 2024 based on the USDA's projection. Costco may be able to shield its members from a notable uptick in grocery prices, but that may come at the expense of higher membership fees. However, if membership fees do rise, chances are we'll be looking at a small increase. And the savings you reap are likely to far outpace the uptick in membership fees.