Let's be realistic- I don't think Sam's is going to flip many members from Costco. Sam's needs to go after folks who are not a member of any club. And there are many such people out there, and that seems to be who Sam's is going after. Costco isn't for everyone. The experience and overcrowding turns many people off. Some people don't find much product they are interested in at Costco ("value" vs. the lowest/cheapest price for stuff).babs wrote: ↑May 17th, 2022, 10:48 pm
The warehouse sector is benefitting by high gas prices and overall inflation driving traffic. Yet Costco keeps pulling ahead with same store sales up over 14% last quarter. The challenge for Sam's is trying to flip members from Costco, as I don't think there are a lot of people without memberships and are open to getting one. That's a daunting challenge.
There may be the few people out there who will pick Sam's over Costco because it is more convenient or less crowded or some other reason but I do not see many Costco customers switching to Sam's because Costco's trap is just too good of a trap.
The segment that interests me is the segment that holds memberships with both Costco and Sam's. That strikes me as the customer where there is a chance to grab some share from Costco with. Sam's also seems much less productive in fresh/perishable food than Costco but Sam's meat department is coming around and their produce department is better than Costco. Their bakery/prepared food is pretty weak but I'm not sure how much sales those would generate even if they managed to triple or quadruple the business in those areas if it would be worth the effort.
What would be funny here is if Sam's is actually flipping customers from Wal Mart. Which I suspect there may be some of happening... which isn't very productive.
The numbers don't lie. The Sam's in my area is much busier than it was 5-7 years ago. I thought the store was a candidate for closure about 7 years ago as inventory got really low for months and traffic had been low. The store has just done better and better the past few years and changes in their strategy/merchandising and the membership promotions have really driven traffic. Sam's is an easy place to shop; it is pleasant and efficient. It is not chaotic like Costco. There are still few to no lines for anything. The people that work at Sam's are exceedingly helpful and when I couldn't find a couple items and the self checkout person came over and asked me if I found everything okay, I was somewhat annoyed by the out of stocks and while I usually just say yes and move on, this time, I decided to be a jerk and say actually I was looking for x item and y item and the employee immediately got someone to check and they were able to pull x item for me out of the back saying it had come on a truck they hadn't put out yet and told me y item was coming in tomorrow and asked if I wanted one held for me to pick up. I didn't take them up on the hold offer but this level of service far exceeded my expectations.