Sam’s Club, a chain owned by Walmart, has moved into action to catch up with Costco in the United States, according to “Fox News.”
According to the American Network, Sam’s Club and Costco have nearly the same number of stores in the United States, but Costco makes about twice as much annual revenue as its competitor.
“The club model survives because you have brilliant merchants who are focused on creating or purchasing great items,” said Sam’s Club CEO Chris Nicholas. Costco has done a great job over the years with the Kirkland brand and we’ve seen it work well.”
Strategy
Costco has also explained its winning recipe in a catalog.
“Our mission was simple: to create an item of the same or higher quality than the most popular brand at a lower price. This can be achieved by controlling every element of creating the item, including packaging and transportation,” the company said.
Sam’s Club therefore adopted this strategy with “Member’s Mark” products.
“Member’s Mark products are exclusive designs that use premium materials and the highest quality ingredients to ensure they are the best quality and value at member-only prices,” the company’s website summarized.
Costco’s most affordable membership card costs $60, compared to its competitor’s $50.
“Member’s Mark” products represent 30% of Sam’s Club sales, while this percentage would be similar at Costco for the Kirkland brand which would represent 28% of sales.
