Sam's Club Is Increasing Its Membership Pricing. Is Costco Next?

Walmart's (NYSE: WMT) Sam's Club has been a bright spot for the company in its recent quarterly results. For instance, the membership-based wholesale business saw its same-store sales increase 9.5% in the company's second quarter. This compared to same-store sales growth of 6.5% at Walmart's namesake stores in the U.S.

Now, Walmart's Sam's Club is going to get another boost as the powerful division flexes its pricing power. The membership wholesale retailer is reportedly raising its annual membership fees, according to a report from CNBC.

The move highlights one of the unique benefits of a membership-based grocer model over a typical grocer. And it begs the question: Could wholesale giant Costco (NASDAQ: COST) follow up with its own price increase, too?

A higher price for better service

Sam's Club Chief Member and Marketing Officer Ciara Anfield told CNBC that the decision for a price increase reflects the heavy investment Walmart has poured into Sam's Club. We've made investments and we believe our proposition, our membership is now worth more, she said. Improvements in recent years include higher-quality merchandise, more private-label items, and technology investments that help with more convenient shopping like curbside pickup.