As competitors,CostcoandSam’s Clubhave several things in common.
Both warehouse chains are open to paid members only.
Both sell bulk goods at bargain rates and both sling ridiculouslycheap hot dogsin their respective food courts.
Photo: Marisa DiPaolo. Design: Joe Heroun / Eat This, Not That!
But the rivalry has been fairly one-sided for some time.
That’s beginning to change, however, as the warehouse-club model becomes increasingly popular amid record inflation.
Even higher-income shoppers are now gravitating to both clubs.
How has Costco responded to its biggest competitor’s recent moves?
By playing it cool and sticking to its (presumably oversized) guns.
It’s also staying the course with its own expansion plans.
Costco Chief Financial Officer Richard Galanti reacted with a mix of confidence and defiance.
“No, we’re going to open where we want to open,” he said.
(He later added he was “just kidding.")
(The retailer historically raises fees about every five years, seven months, on average.)
“We’ll let you know,” he said.
Sam’s Club has experienced the opposite.
“We’re not seeing an impact from the fee increase,” Sam’s Club CEOKathryn McLay said.
Meanwhile, Costco reported over 68 million memberships worldwide, up 7% from last year.
The company collected more than $1 billion in membership fees over the last quarter alone.
Executive members also account for about 73% of the club’s business, he noted.
“They’re more loyal, they spend more, and they come more frequently,” he said.
