The value proposition presented by warehouse clubs — offering lower average costs per item through bulk buying — prompts a jump in sales share for major warehouse club stores, research shows.
Consumers’ quest for value as inflation and other factors are impacting grocery bills has helped club stores become an attractive solution for shopping needs.
Big-box and club stores have been popular since the mid-1970s. They differ from traditional department and chain stores due to their large size, buy-in-bulk products and membership requirements.
When it came to shopping this past year, many consumers prioritized one-stop shopping and cost savings as they dealt with the complexities of the pandemic. These priorities aided the warehouse clubs and supercenters channel as more consumers stockpiled goods and dealt with reduced shopping options.
The combined sales of the Top 3 club stores — Costco, Sam’s Club and BJ’s Wholesale Club — reached an estimated $158.4 billion in 2017, up 2.9 percent over 2016, according to Chicago-based Mintel’s June 2017 report “Warehouse Clubs US.” Yet, shrinking households no longer needing to purchase bulk items, eCommerce profitability and the cost of membership fees are barriers to the success of club stores.
Consumers are EQUIPPED with a number of tricks to help them save a few dollars when it comes to grocery shopping. Coupons, rewards cards, mail-in rebates and mobile apps are just a few ways to show off thrifty skills. But as much as these resources play a role in their saving habits, they also can limit where consumers shop and how much they buy. Enter the warehouse/club stores.
As non-traditional grocery retailers see more competition from dollar store formats and wholesale club stores, mass merchandisers and supercenters are enlisting new ways to grow their consumer bases.