The warehouse club store model is an interesting one. Some consumers will not, under any circumstance, pay a membership fee for the option to walk into a store.
Other consumers, however, are more than willing to shell out membership fees if it means getting access to a curated selection of products and discounts on bulk essentials, from paper towels to laundry detergent to eggs.
Within the warehouse club arena, the two major players have long been Costco and Sam’s Club. And if it seems like Sam’s Club is the brand that lives in Costco’s shadow and is constantly trying to keep up, that’s not necessarily off base.
Costco has slightly more U.S. stores than Sam’s Club does — 634 compared to 601.
But there are a number of other things Costco seems to do better.
Not only does Costco tend to stock more essential grocery items than does Sam’s Club, but its return policy is slightly more flexible.
And perhaps the greatest advantage Costco has over Sam’s Club is its Kirkland Signature brand.
Sam’s Club copies Costco with a major change.
Costco has a clear competitive edge over Sam’s Club
Kirkland Signature has become synonymous with quality and has a great reputation not just among Costco members, but across the retail spectrum.
Sam’s Club’s Member’s Mark brand has improved through the years. But it tends to trail behind Kirkland Signature in terms of quality and desirability.
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As Chris Versace, a retail industry expert with 30 years’ experience, says, “Costco has smartly leaned into the fresh food category over the last few years, a move that is clearly resonating with consumers, as is its private label Kirkland brand.”
“Comp sales figures against Kroger (KR), Albertsons (ACI), Walmart’s (WMT) Sam’s Club, and even BJ’s Wholesale (BJ) confirm Costco continues to win consumer wallet share. We attribute that to the value Costco brings to its members, but also the talent of its merchandising team to read the economy as well as the needs and wants of its members.”
Sam’s Club follows Costco’s lead with big change
Another way Costco maintains such a loyal membership base is its constant efforts to add value for shoppers. One change Costco recently implemented was expanded store hours.
In addition to implementing early shopping hours for Executive members, Costco added an additional shopping hour for all members on Saturday evenings.
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During Costco’s most recent earnings call, CEO Ron Vachris said, “We estimate these incremental hours have added about 1% to weekly U.S. sales since implementation.”
Now, Sam’s Club is taking a page out of Costco’s playbook by extending its hours as well.
Most Sam’s Club locations will open at 8 a.m. and close at 8 p.m. every day. Plus members will continue to enjoy exclusive early shopping hours from 8 a.m. to 9 a.m. daily.
On Sundays, meanwhile, Sam’s Club will operate with the following hours:
- Curbside pickup: 7 a.m. – 8 p.m.
- Plus member hours: 8 a.m. – 9 a.m.
- Regular member hours: 9 a.m. – 8 p.m
For a company that seems to be perpetually playing catch-up to Costco, Sam’s Club was smart to expand its hours and lean into a larger window for curbside pickup.
Curbside pickup is one service Costco refuses to offer, and for good reason. Costco wants members shopping in stores because that often leads to extra purchases.
Sam’s Club doesn’t seem to be worried that its curbside offering will take away from in-store sales. But if it’s going to offer curbside pickup, the more convenient it is for members, the more of a differentiator it can be from Costco.
Maurie Backman owns shares of Costco.