Costco's Fastest-Growing Member Demographic Is Not Who You'd Expect.

Costco CFO Gary Millerchip made a point during the company's fourth-quarter 2026 earnings call that caught analysts' attention: for the first time in the company's history, more than a quarter of all Costco members are now under 40. Millerchip called it a really positive sign, framing the younger member milestone as an important indicator of future growth in spending per member over time. The development challenges the conventional wisdom that Costco's core customer is a suburban homeowner stocking up for a household of four, and suggests the warehouse club has found genuine appeal among younger adults who may be single, renting, or still building their households but who see real value in bulk purchasing, cheap gasoline, and the Kirkland Signature private-label products that have become something of a cult phenomenon in their own right. Costco also reported record levels of digital engagement during fiscal 2026, a signal that younger members are not just signing up but actively shopping, and that the company's investment in its app and online capabilities is translating into behavior the CFO is now pointing to publicly as a driver of future revenue.

The shift toward younger membership carries real upside for Costco's business model. The company's revenue is structurally dependent on membership fees, which flow directly to the bottom line, and on members who renew year after year and gradually increase their spending as their lives expand. A member who joins at 28, gets married, has children, buys a house, and keeps their Costco card through all of it is worth considerably more over a lifetime than a member who joins at 50. Getting them in early is therefore not just a vanity metric but a strategic priority that Millerchip was deliberate about naming. The challenge is keeping them. Younger shoppers are more mobile, more willing to cancel subscriptions when they feel less value, and more likely to join out of curiosity or for a single category than to build a wholesale lifestyle around a membership. Costco's generous cancellation and return policies make it easy to walk away, which cuts both ways: it reduces the friction of joining but also removes the lock-in that keeps members on the rolls through lean months. The company said it has been working on more targeted digital communications specifically for members who joined through online channels, a recognition that the younger member requires a different kind of relationship maintenance than the shopper who learned about Costco from their parents and simply never left. For now, the number that matters is the one Millerchip cited: more than one in four Costco members is under 40, and the company thinks that is a very positive sign.

Source:https://finance.yahoo.com/markets/stocks/articles/costco-getting-kind-member-233300629.html