Wholesale Clubs: Business vs. Consumer Focus

Retail's wholesale club landscape is changing dramatically, but are you aware of how these shifts might affect your shopping strategy or business approach? Drawing from my extensive career in wholesale club retail, I share fascinating insights from a recent Warehouse Club Focus analysis that reveals surprising trends in how the major players are positioning themselves today.

When Sol and Robert Price created the wholesale club concept in the late 1970s, it was fundamentally a business-to-business model targeting restaurants, convenience stores, and small offices. Today's reality looks remarkably different. BJ's has reduced its business-friendly assortment from 24% to just 18% since 2005. More dramatically, Costco's traditional clubs have slashed their wholesale focus from 54% in the late 90s to a mere 16% today (though they maintain 32 separate business-centered locations nationwide).

The standout finding? Sam's Club has maintained a stronger commitment to its business-member roots, with 35% of food items and 18% of non-food merchandise still targeting wholesale customers. This strategic divergence carries significant implications for manufacturers and shoppers alike. Suppliers need tailored approaches when working with each chain rather than a one-size-fits-all strategy. Meanwhile, consumers should carefully consider their needs—business or personal—when deciding where to invest their membership dollars.

Whether you're a small business owner looking for true wholesale opportunities, a manufacturer seeking the best retail partners, or a savvy consumer maximizing value, understanding these shifting priorities helps you navigate the evolving wholesale club marketplace. The next time you're considering which membership card to pull out, remember that behind the similar warehouse aesthetics lie increasingly different business strategies and customer focuses.

Chapters

• 0:00 Introduction to Warehouse Club Focus
• 1:08 Business Member Percentage Analysis
• 3:28 Sam's Club's Business Member Strategy
• 4:21 Takeaways for Manufacturers and Consumers

Transcript

Speaker 1: 0:03

Well, hello everyone, I'm Scott Benedict. One of the things I was reading with interest recently is the latest issue of Warehouse Club Focus, which is one of the most respected trade publications focused on the wholesale club industry. I spent a good portion of my career involved in the wholesale club business Nearly half of all the years I've been in retail and been involved in the wholesale club business nearly half of all the years I've been in retail and been involved in that. So I read that publication with interest pretty regularly. A recent issue of that publication was focused on serving the business member. For those of you who aren't familiar with the wholesale club business, the business member For those of you who aren't familiar with the Wholesale Club business, the business member was really the genesis of the Wholesale Club model back in the late 70s when Price Club and Sol Price and Robert Price first really dreamed up the concept and focusing on small businesses like restaurants and convenience stores and doctor's offices and things like that was really core to the business. Well, this article was really focused on analyzing the assortment of all three of the major US players in the wholesale club industry BJ's, costco and Sam's Club and one of the interesting elements of this article was the percentage of each manufacturer's or each retailer's assortment that is really business-friendly items, business-friendly SKUs, was interesting. The analysis said that BJ's has seen their wholesale or resale item mix fall from 24% of the total in 2005 to just 18% today. It said that Costco in their traditional clubs is down from about 54% in the late 90s of their assortment was focused on wholesale to just 16% focused on business members today. Now the caveat was that is that Costco also operates some very wholesale focused business locations and in those the mix is very is very different in their business centers, which are 32 across the country, and the Sands Club is one of the three operators that this article and the analysis said has kind of bucked the trends where 35% of food items and 18% of non-food items are still aimed at the wholesale segment, at that more business-focused customer, and so it was really interesting to see that, both as a long-term part of that industry as well as spending a fair part of my career at Sam's Club, I watched that, or read that, with interest and the thing that occurred to me is that if you are a manufacturer, a product, a supplier, your approach to all three of the Wholesale Club chains probably shouldn't be identical if you've got items and particular presentation of products that is either targeted to a wholesale member or to a consumer member, and so your strategy can't be identical across all three.

Speaker 1: 3:27

And the thing that was really a big takeaway for me is that the wholesale club model is continuing to evolve. Business members clearly still matter, especially when it comes to stability during economic downturns, but I think that the key takeaway is that the approach that all three chains take is not identical and it's really. If you're a manufacturer product, it's worth stopping and taking note of what the right strategy is to sell to all three of those chains. And if you're a consumer wanting to shop, there is your aim more for business or for your family's personal consumption, and that really should skew your perspective on which of those. If you have a choice if you live in a part of country that has all three or two of the three about which way you want to spend your membership dollar, and I thought that was kind of interesting worth sharing. So for Scott's Thoughts, iott benedict, thanks for listening.