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 Sam's Club (Wal-Mart); Costco Wholesale; BJ's Wholesale Club; and Meijer (all based in the US), as well as Carrefour (France), Metro (Germany), and Tesco (UK).
The Asia/Pacific region, with its rising middle-class populations, is a magnet for global retailers in search of growth. Four Asian markets (China, India, the Philippines, and Vietnam) boast GDP growth in excess of 5%. Of about 800 Sam's Club stores worldwide, about 15 are in China. Costco operates an online store with China's Alibaba. China's retail market was expected to surpass that of the US in 2016, with total sales of nearly $4.9 trillion compared with about $4.8 trillion in the US, according to eMarketer.
The US warehouse club and superstore industry includes about a dozen companies with about 5,300 stores and combined annual revenue of about $445 billion.
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.
Warehouse clubs differ from superstores by requiring a membership to shop.
Quarterly Industry Update
Call Preparation Questions
Web Links and Acronyms