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.

Costco said Wednesday that its net income climbed 11 percent to $478 million, or $1.08 per share, for the quarter that ended Aug. 28. That's up from $432 million, or 97 cents per share, a year earlier. The quarter included a "last in, first out" charge of 4 cents per share, an accounting measure that companies use to revalue their inventory when prices rise or fall notably.

Analysts expected earnings of $1.10 per share on revenue of $27.6 billion, excluding one-time items like that charge, according to FactSet.

Revenue rose 17 percent to $28.18 billion as the company's sales and membership increased. It said its operating margin shrank to 2.7 percent from 2.9 percent as it dealt with higher merchandise and overhead costs.

Costco shares fell $1.40, or 1.7 percent, to close at $80.25 Wednesday.

But many were glad to see the company plans to raise its membership fees Nov. 1, its first hike in five years. The increase will affect an estimated 22 million club members in the U.S. and Canada, most of whom pay $50 or $100 per year.

"We feel that the enhanced value of the Costco membership over the past five to 10 years far exceeds the modest $5 and $10 increase in the annual membership fee levels, and (the increase) will continue to allow us to bring our members even greater value on everything we offer," Chief Financial Officer Richard Galanti told investors.

The increase isn't likely to cost the company many members because it rarely increases its fees, and membership hasn't faltered following past hikes, Arnold said. Consumers are likely to remain eager for deals as prices for food and other consumer goods are expected to continue to rise in the coming year.

"It's in their DNA to keep pricing down and drive the pricing value that their members want in exchange," Arnold said.

Competitor BJ's Wholesale Club Inc. raised its membership fees from $45 to $50 earlier this year and Sam's Club, a division of Wal-Mart Stores Inc., has charged $40 for many years. However, Sam's Club also announced a seasonal membership this week, called "$15 for $15 weeks" to carry through the holidays.

Costco, which is the nation's largest wholesale club operator, is a top performer among retailers as it attracts more shoppers each quarter.

During the fourth quarter, its revenue at clubs open at least a year rose 12 percent. That comparison is a key gauge of a retailer's performance because it excludes stores that recently opened or closed.

For the year, Costco's earnings climbed 12 percent to $1.46 billion, or $3.30 per share. That compares with earnings of $1.3 billion, or $2.92 per share, the previous year. The annual results included a "last in, first out" charge of 12 cents per share.

Revenue for the year rose 14 percent to $88.92 billion from $77.95 billion.

The company, based in Issaquah, Wash., operates 592 warehouses globally. It opened 20 new warehouse clubs during the year. It plans to open 20 stores in the coming year, about half in the U.S. It also plans to reopen its store in Tamasakai, Japan, which has been closed since the earthquake and tsunami in March.