A WALMART executive admitted he looks to Costco’s unique brand for inspiration as Sam’s Club tries to improve its member brand.
With Sam’s Club plans to open more stores this year, Walmart is looking to revamp its exclusive Member’s Mark brand.
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Sam’s Club CEO Chris Nicholas revealed in a recent interview that the company has been paying close attention to Costco’s Kirkland Signature.
He noted that the main differences between Walmart’s wholesale club and the Costco brand have to do with quality.
“The club model survives because there are brilliant merchants focused on creating or purchasing exceptional items,” he said. CNBC.
“Costco has done a great job over the years with Kirkland and we’ve seen it be a success.”
Megan Cozier, chief marketer at Sam’s Club, helped drive the effort to source better quality products after purchasing an inflatable pool from Sam’s Club that began leaking after just a few uses.
Over the course of several years, Sam’s Club consolidated more than 20 of its private brands into one, becoming Member’s Mark.
The company aims to update its food and merchandise standards by 2025, doing things like switching to antibiotic-free poultry and fair trade certified coffee beans.
To ensure customers are getting what they want, Walmart launched a program that allows customers to give feedback on flavors, designs and more before merchandise even arrives at the store.
“They’re picky, like, ‘Hey, this stitching isn’t good enough or the stitching here needs to be better or this needs to be double stitched or you don’t have enough lobster in your lobster cover. [and cheese]’” said Nicholas.
THE IMPORTANCE OF PRIVATE BRANDS
Revamping member brands is a critical step if Sam’s Club wants to compete with Costco.
Although both wholesale retailers have the same number of clubs in the US, Costco has double the annual revenue.
In the most recent fiscal year, Sam’s Club brought in $86.2 billion in net sales, while Costco had $176.63 billion.
Customer interest in private label items has greatly improved in recent years, which has contributed to Costco’s success.
Between 2019 and 2023, sales of private label items increased 34%, according to the Private Label Manufacturers Association’s annual report, conducted by market research firm Circana.
Membership and store cards offered by major retailers
Here’s a breakdown of store cards offered to customers from various retailers and their benefits
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Costco:
- Gold Star Membership: $60 per year, shop at all Costco stores and online with two additional cards for your family.
- Executive Member: $120 per year, 2% annual rewards, discounts and additional benefits on Costco services, shop online and in-store and get two additional cards for home use.
- Sign up for a Costco Membership here
Sam’s Club:
- Club membership: $50 Per Year, Bonus Offers, Same Day Delivery, Instant Savings, Sam’s Club Mastercard, Members Only Fuel Savings, Tire & Battery Center, Free Membership and Complimentary Memberships.
- More membership: $110 per year, all the benefits of Club membership plus Sam’s Cash, free shipping, free curbside pickup, advance purchases, and pharmacy and optical discounts.
- Sign up for Sam’s Club membership here
Target:
- Target Circle: A free rewards program that allows users to earn 1% in Target Circle earnings rewards when a qualifying purchase is made, access personalized deals and offers, earn a birthday gift, and earn a vote to help direct how Target helps your community .
- Target Circle Card: A credit, debit or reloadable card that offers users 5% off in-store and online, as well as exclusive offers, free two-day shipping and an additional 30-day return window. Formerly Target RedCard.
- Sign up for Target circle here
Walmart:
- Walmart+: $12.95 per month or $98 per year with 30-day free trial. It offers members free delivery, free shipping with no minimum spend, fuel savings, Paramount+ membership, car, Walmart+ travel, home returns, mobile scan and store entry, and early access to offers and product launches.
- Sign up for Walmart+ here
Michael Baker, a retail analyst at DA Davidson, admitted that even with the revamp, it will be a while before Sam’s Club overtakes Costco.
“Never say never,” he said. “Who knows? But I think it will take a long time.”
‘TIME FOR A COSTCO MEMBERSHIP’
Although Sam’s Club has promised to make big changes, some shoppers still aren’t happy with the wholesaler.
A Facebook user, posted a photo of the store’s empty coolers, revealing that it wasn’t the first time it stopped working.
“It’s time to become a Costco member!” they joked.
In the comments, one person said that their local Sam’s Club had been remodeling their refrigerators for the past two months.
“Costco is my next stop too!” the buyer commented.
“Costco and BJ’s are the ones doing the business that Sam’s can’t do right now,” wrote another customer.
One person said management at the local Sam’s Club had to discard their meats because the coolers closed.
The US Sun has reached out to Walmart for comment.
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