Walmart’s Sam’s Club and Costco make key pricing moves | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Sam’s Club and Costco have a unique rivalry, unlike most retailers, which have a key competitor that mostly sells the same stuff.

Because both chains are membership-based, they’re generally only competing for new members in locations where they both have clubs in the same geographic space. Even someone who strongly prefers Costco (COST) over Sam’s Club probably won’t drive more than a few miles if the Walmart brand happens to be a lot closer.

In reality, once Costco or Sam’s Club capture a member, they’re essentially competing with themselves. The goal of both chains is, of course, to hold onto members and maintain high renewal rates.

If they can do that, their businesses succeed, because membership revenue is essentially pure profit.

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Yes, Costco and Sam’s Club want people to shop in their warehouses, but they mostly want that to entice the member to renew. All retail sales made by both chains are very low margin, and the two retail giants do everything they can to lower prices for members.

It’s a retention strategy that works, and now Sam’s Club has made a move that may attract the attention of some diehard Costco fans.

Sam’s Club has decided to lower prices at a time when it has higher costs.

Image source&colon; Scott Olson/Getty Images

Sam’s Club holds steady on a lot of prices (for now)

Consumers have become concerned about price because of the uncertainty around tariffs and the possibility of an escalating war with Iran. Those concerns have generally been good for Sam’s Club and Costco, since in general, they have lower prices than other retailers and have been more willing to avoid passing on increases to members.

Now, the retail giant has been very vocal about an effort to help members feel better about their finances, at least for a while.

“This summer, we’re giving our current and future members an extra reason to be part of the club,” the chain shared on its website.

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The chain said that it has been listening to its customers and wants to meet their needs.

“So, starting today, we’re locking the value on more than 1,000 summer favorites through July 22. From grilling gear and coolers to pool floats and fresh-cut fruit trays — members can count on consistent value for the season’s must-haves. No surprises. Just confidence,” the warehouse club shared.

Holding prices may not seem that great, but it’s a big promise at a time when costs are increasing.

“And it doesn’t stop there. On July 23, we roll right into our July Instant Savings Event, bringing even more deals on popular summer picks and back-to-school essentials,” it added.

Costco has made pricing moves, too

Costco CEO Ron Vachris did make it clear that his chain has also been battling to keep prices down.

“Our merchandising and operations team did a fantastic job in the quarter, delivering some strong financial results, while also maintaining our competitive price position despite a challenging macroeconomic backdrop,” he said during the chain’s third-quarter earnings call.

The CEO explained how Costco is staying ahead of tariffs as well it can.

“We’re remaining agile as a situation with tariffs evolves, while also supporting the commitments we’ve made with our long-term suppliers. As an example of this, during the third quarter, we rerouted many goods sourced from countries with large tariff exposure to our non-U.S. markets,” he shared.

The chain also took in added inventory.

“In the U.S., we pulled forward some items that we had planned for the summer and sourced additional locally produced goods to reduce tariff impacts and ensure that we were in stock. Actions such as these are allowing us to continue to provide great values for our members, while also delivering value to our shareholders,” he added.