Warehouse clubs thrive

DISCUSSION TOPIC:  Consumers Stocking Up in Warehouse Clubs


There’s no doubt that many American consumers and businesses are going through a rough patch at the moment. For warehouse clubs, however, the weak economy has proven to be something of a boon as savings minded consumers look for the low unit prices that come with buying in bulk.

Costco, Sam’s Club and BJ’s all reported strong sales and profit results this week. Costco saw same-store sales climb seven percent last month while BJ’s experienced a 5.9 percent increase. Sam’s same-store sales were up 2.8 percent.

Discussion questions: Do you expect that warehouse clubs will continue to perform well should the economic conditions stay the same or worsen? Will consumers continue to shift their dollars to warehouse clubs after the economy has rebounded? What do you see as the relative strengths/weaknesses of the three warehouse club chains during a down economy?

My post:

This is a perfect time for Costco and BJ’s to strengthen their positioning.  Costco will do particularly well, as they have developed the reputation as a place for the affluent to shop with no embarrassment.  They will shift dollars away from categories that aren’t experiencing strong demand, to more basics, but otherwise I expect them to thrive during this period and even after a recovery sets in.

Mike Osorio, your Dare to be Contagious! TM strategist




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