Warehouse Clubs & Superstores

Warehouse Clubs & Superstores

Brief Excerpt from Industry Overview Chapter:

Companies in this industry operate membership retail stores that sell groceries, health and beauty items, electronics, and other merchandise; the majority of items are sold in large quantities. Major companies include BJ's Wholesale Club, Costco Wholesale, Meijer, Sam's Club (all based in the US), as well as Carrefour (France), Metro (Germany), and Tesco (UK).

COMPETITIVE LANDSCAPE

Demographics and small business growth drive demand, and spending in warehouse clubs generally resists economic cycles. The profitability of individual companies depends on high volume sales, low-cost purchasing, and efficient distribution. Large chains dominate the market due to advantages in purchasing, distribution, and finance. The US industry is highly concentrated: the top four companies account for more than 90% of revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products sold by warehouse clubs are medicines, minerals, and supplements, which account for about 10%. Other products include food dry goods (more than 5%) and candy, prepackaged cookies, and snack foods (more than 5%), prescriptions (nearly 5%) and fresh meat and poultry (nearly 5%). Most products are available only in bulk quantity. Warehouse clubs may also have onsite gas stations, pharmacies, optical centers, or food courts.