A warehouse club (or wholesale club) is a retail store, usually selling a wide variety of merchandise, in which customers may buy large, wholesale quantities of the store's products, which makes these clubs attractive to both bargain hunters and small business owners. The clubs are able to keep prices low due to the no-frills format of the stores. They are distinguished from traditional cash-and-carry wholesale businesses in that their warehouses are substantially larger in size, and they do not cater purely to businesses but also allow some or all types of consumers to obtain memberships. They are also distinguished from warehouse stores in that they usually charge annual membership fees, and require presentation of proof of membership at the warehouse entrance and again at the point of sale.
Membership in a warehouse club superficially resembles that in a consumers' cooperative, but lacks key elements including cooperative ownership and democratic member control. The use of members' prices without cooperative ownership is also sometimes used in bars and casinos.
History
A BJ's Wholesale club in Virginia
In 1976, Sol Price (who in 1954 founded FedMart, an early US discount store) and his son Robert Price founded Price Club in San Diego, as their first warehouse club. In a 1988 article, The New York Times Magazine credited Price Club as the "pioneer" of the warehouse club retail format.[1] After his departure from FedMart, Sol Price noticed that small businesses in San Diego either ordered directly from four or five large wholesalers or they bought locally from relatively small cash-and-carry wholesalers.[1] Therefore, Price Club was originally positioned as a much larger, volume-oriented version of the cash-and-carry wholesale format, meaning that prospective members were required to present resale certificates or professional licenses.[1] Based on a customer's suggestion, Price Club subsequently allowed government employees to apply for memberships.[1] This privilege was later extended to employees of utility companies and hospitals, followed by members of certain credit unions and savings deposit clubs.[1]
In 1982, the discount pioneer John Geisse founded The Wholesale Club of Indianapolis, which he sold to Sam's Club (a division of Walmart) in 1991.[2]
As of 1988, Price Club was the leader of the warehouse club industry, with over 40 warehouses operating across the United States and Canada.[1]Stephen F. Mandel, Jr., then a Goldman Sachs analyst, called the warehouse club "the greatest revolution in retailing in the last 10 years."[1]
By 1992, Sam's Club had surged past both Price Club and Costco to become the industry leader with 222 warehouse clubs.[7] The four other major players were Pace (95 clubs), Costco (87 clubs), Price Club (80 clubs) and BJ's (31 clubs).[7] Analysts were already seeing signs of market saturation along the West Coast of the United States, the first region in which warehouse clubs were developed.[7]
In 1993, Costco and Price Club agreed to merge operations, after Price declined an offer from Sam Walton and Walmart to merge Price Club with Sam's Club.[8] Costco's business model and size were similar to those of Price Club, which made the merger more natural for both companies.[9] The combined company took the name PriceCostco, and memberships became universal, meaning that a Price Club member could use their membership to shop at Costco and vice versa. PriceCostco boasted 206 locations generating $16billion in annual sales.[4] PriceCostco was initially led by executives from both companies, but in 1994, the Price brothers left the company to form Price Enterprises,[9][10] a warehouse club chain in Central America and the Caribbean unrelated to the current Costco.[11]
In 1997, Costco changed its name to Costco Wholesale Corporation, and all remaining Price Club locations were rebranded as Costco.[4][9]
As of 2009[update], the three largest warehouse club chains operating in the United States are BJs, Costco, and Sam's Club.[12] BJ's Wholesale Club is one of the smaller competitors, with stores located primarily in the Eastern United States. Costco and Sam's Club are the largest chains. Costco has locations in seven other nations and regions including Australia, Canada, Japan, Korea, Mexico, Taiwan, and the United Kingdom. Sam's Club, a division of Walmart, claims a membership base of 47 million persons and 602 stores across the United States (as of June 2019).[13]
Costco, operates in the U.S., Canada, Mexico, the UK, Iceland, Australia, New Zealand, Sweden, Spain, France, South Korea, Mainland China, Japan and Taiwan China
Metro AG (branded as Makro in some countries), headquartered in Germany, majority control in different regions by multiple third parties, Metro AG has 674 wholesale stores in 24 countries.
PriceSmart, operates in Central America and Caribbean; previously operated in Asia-Pacific region
Sam's Club, operates in the U.S., Mexico and other countries
Selgros, operates in Germany, Poland, Romania and Russia
SourceClub, owned by Meijer, from 1992 to 1994. Only had seven locations, all in Michigan, but helped loosen restrictions on who can become members industry-wide.
Super Saver, merged with Sam's Club (Southeast US)[citation needed]
Titan Warehouse Club Inc., an early warehouse concept in Canada based in Calgary with locations in Toronto/Kitchener/Stoney Creek areas in the 1985–1994[citation needed]
Costco Wholesale Corporation is an American multinational corporation which operates a chain of membership-only big-box warehouse club retail stores. As of 2023, Costco is the third-largest retailer in the world and is the world's largest retailer of choice and prime beef, organic foods, rotisserie chicken, and wine as of 2016. Costco is ranked #11 on the Fortune 500 rankings of the largest United States corporations by total revenue. Costco uses a club warehouse wholesale retailer channel of distribution while also selling their private label brand directly to consumers.
A hypermarket is a big-box store combining a supermarket and a department store. The result is an expansive retail facility carrying a wide range of products under one roof, including full grocery lines and general merchandise. In theory, hypermarkets allow customers to satisfy all their routine shopping needs in one trip. The term hypermarket was coined in 1968 by French trade expert Jacques Pictet.
Sam's West, Inc. is an American chain of membership-only warehouse club retail stores owned and operated by Walmart Inc., founded in 1983 and named after Walmart founder Sam Walton as Sam's Wholesale Club. As of January 31, 2019, Sam's Club ranks second in sales volume among warehouse clubs with $84.3 billion in sales, behind its main rival Costco Wholesale.
A discount store or discounter offers a retail format in which products are sold at prices that are in principle lower than an actual or supposed "full retail price". Discounters rely on bulk purchasing and efficient distribution to keep down costs.
Price Club was an American warehouse club chain. Founded in 1976, it merged with its competitor, Costco Wholesale, in 1993. The original Price Club warehouse in San Diego, California, is now Costco location number 401.
Sol Price was an American retailer and the founder of FedMart, Price Club and PriceSmart. He was considered the "father" of the "warehouse store" retail model.
Zayre was a chain of discount stores that operated in the eastern half of the United States from 1956 to 1990. The company's headquarters was in Framingham, Massachusetts. In October 1988, Zayre's parent company, Zayre Corp., sold the stores to the competing Ames Department Stores, Inc. chain. In June 1989, Zayre Corp. merged with one of its subsidiaries, The TJX Companies, parent company of T.J. Maxx, which still exists today. A number of stores retained the Zayre name until 1990, by which time all stores were either closed or converted into Ames stores.
A big-box store is a physically large retail establishment, usually part of a chain of stores. The term sometimes also refers, by extension, to the company that operates the store. The term "big-box" references the typical appearance of buildings occupied by such stores.
James D. Sinegal is an American billionaire businessman and the co-founder and former CEO of the Costco Wholesale Corporation, an international retail chain. He served as Costco's president and CEO from 1983 until 2011. As CEO of Costco, Sinegal was known for his hands-on humanitarian approach to business, which he learned from his mentor, Sol Price. He prioritized customer and employee satisfaction over shareholder interests and is also known for his philanthropic efforts.
Walmart Canada is a Canadian retail corporation and the Canadian branch of the U.S.-based multinational retail conglomerate Walmart. Headquartered in Mississauga, Ontario, it was founded on March 17, 1994, with the purchase of the Woolco Canada chain from the F. W. Woolworth Company.
FedMart was a chain of discount department stores started by Sol Price, who later founded Price Club. Originally a discount department store open to government employees paying a $2 per family membership fee, FedMart earned four times more than its investors had projected in its first year. Over the next 20 years, FedMart grew to include 45 stores, mostly in California, and the Southwest in a chain that generated over $300 million in annual sales. The business expanded to several states in the Southwest United States. Many stores were previous White Front or Two Guys locations. Price later sold two-thirds of the chain to Hugo Mann, a German retail chain, in 1975 and was forced out of his leadership position the following year. FedMart went out of business in 1982.
The history of Walmart, an American discount department store chain, began in 1950 when businessman Sam Walton purchased a store from Luther E. Harrison in Oklahoma City, Oklahoma, and opened Walton's 5 & 10. The Walmart chain proper was founded in 1962 with a single store in Rogers, expanding inside Oklahoma by 1968 and throughout the rest of the Southern United States by the 1980s, ultimately operating a store in every state of the United States, plus its first stores in Canada, by 1995. The expansion was largely fueled by new store construction, although the chains Mohr-Value and Kuhn's Big K were also acquired.
McLane is an American wholesale supply chain services company that distributes products to convenience stores, discount retailers, wholesale clubs, drug stores, military bases, fast-food restaurants, and casual dining restaurants throughout the United States. It is also a wholesale distributor of distilled beverages in some parts of the country.
Jeffrey Hart Brotman was an American businessman, investor, lawyer, and philanthropist. Brotman was the co-founder and chairman of Costco Wholesale Corporation.
Walter Craig Jelinek is an American businessman who served as president and CEO of Costco from 2012 to 2023, when he succeeded the company's founder, James Sinegal.
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