Bentonville, Arkansas – In the competitive retail landscape, Sam’s Club, a subsidiary of Walmart, is strategically positioning itself to rival its competitor Costco through the use of private labels. By emphasizing the quality, quantity, and variety of its private brand Member’s Mark products, Sam’s Club aims to directly compete with Costco’s highly successful Kirkland Signature brand.
The battle between name-brand and store-brand products has been ongoing for years, with arguments that some household items like toilet paper and paper towels are virtually indistinguishable. However, the real challenge lies in specialty foods and apparel, where brand loyalty and quality are more pronounced.
Despite having a similar number of clubs across the United States, Costco boasts about twice the annual revenue of Sam’s Club, as reported by CNBC. This stark difference in revenue has prompted Sam’s Club to intensify efforts to increase its market share and compete more effectively in the industry.
Sam’s Club CEO, Cris Nicholas, acknowledged the success Costco has achieved with Kirkland Signature and emphasized the importance of creating exceptional items to thrive in the club model market. By developing products that match or surpass leading brands in quality at a lower cost, Sam’s Club aims to attract more value-conscious consumers to its stores.
Costco’s Kirkland Signature line, which debuted in 1995, has become synonymous with quality and value. The catalog highlighting the benefits of a Costco membership showcases popular Kirkland Signature products such as dish detergent, laundry detergent, and vitamins, inviting consumers to compare them with brand-name counterparts.
Both Costco and Sam’s Club require club memberships for shoppers to access Kirkland Signature and Member’s Mark items, respectively. The pricing structure for memberships varies between the two retailers, with Costco memberships ranging from $60 to $120 per year, while Sam’s Club charges $50 to $110 per year.
Sam’s Club’s Member’s Mark brand accounts for approximately 30% of its annual sales, slightly edging out Costco’s Kirkland Signature, which represents 28% of its total sales, according to CNBC. The focus on providing exclusive designs, top-of-the-line materials, and high-quality ingredients at members-only prices underscores Sam’s Club’s commitment to delivering superior value to its customers.