is that members PAY an annual membership fee for the "perception" (Costco's words from their annual report, not mine) of superior value and membership benefits. When member benefits are shaved, and prices are raised, where is the value? And when members determine that the perception of value is no longer reality, will membership growth also stall out, or heaven forbid, start to drop? And does that also mean that Costco will be unable to raise membership prices in the near term? There just aren't as many treasure hunt type-merchandising deals as there were in prior years.
Secondly, a big unexpressed f....up was co-branding a MasterCard Costco credit card in Canada while co-branding a separate Visa Costco Card in the United States.
Commencing June 20th, that Canadian Costco MasterCard CANNOT be used for any purchase at the US stores. In the US stores, one pays with Visa, or cash....MasterCard and Amex are out. So, all of those cross border shoppers will have to dig into their wallets and use an alternative Visa branded card, one that does not deliver any co-brand revenues for Costco. And considering the great number of Canadian cross border shoppers (Bellingham Washington is reportedly the #1 Costco for profits in the United States), that screwup will hurt revenues going forward, which will diminish some of the benefits of ditching Amex. Canadians will NOT be permitted to apply for the US card to use in the United States (according to Costco personnel manning the application desk).
Bean-counters and cost-cutters have infiltrated Costco to such an extent that they are killing what was an almost unassailable retailer. All that Amazon talk coming from Costco executive is not the existential threat to Costco; rather it is head office, determined to ruin the member experience, that represents the existential threat.