First Research US Industry Profile

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Warehouse Clubs & Superstores
SIC Codes: 5399, 5411
NAICS Codes: 452311
Last Quarterly Update: 9/9/2019
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 (Walmart); 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 large Asian markets (China, India, the Philippines, and Vietnam) boast GDP growth in excess of 6%. Costco Wholesale opened its first Chinese physical store in Shanghai in 2019. The US warehouse club giant also operates an online store in partnership with China's Alibaba. Costco joins Sam's Club, which operates about 25 locations in China, and Germany's Metro with 96 stores there. China's retail market surpassed 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. (However, the US has regained the lead due to slowing economic growth in China and record US retail sales.) India has overtaken China in GDP growth as China's economy slows and economic liberalization and reduced controls on foreign trade and investment in India accelerate growth.
The US warehouse club and superstore industry includes about a dozen companies with about 5,500 stores and combined annual revenue of about $480 billion.
Competitive Landscape
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. Superstores typically offer a wide range of products, while warehouse clubs offer a limited selection. Both types of retailers sell products across many categories including food, and both compete with grocery stores, mass merchandisers, department stores, drugstores, specialty retailers, and wholesalers. Some retailers, such as Walmart, operate warehouse and superstores as well as traditional discount stores.
Amazon and Amazon Prime (the online retailer's $119 per year 2-day shipping service) and newer online players like Boxed.com represent a growing threat to warehouse clubs and superstores. The proportion of Costco members who are also members of Amazon Prime reached more than 60% in 2018, according to UBS research.
Products, Operations & Technology
Major products sold by warehouse clubs are groceries; drug, health, and beauty aids; prescription medicine; and electronics. Most products are available ... plus:
Sales & Marketing
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Finance & Regulation
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Regional & International Issues
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Human Resources
Also includes the following chapters:
Quarterly Industry Update
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Industry Indicators
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Business Challenges
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Trends and Opportunities
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Call Preparation Questions
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Financial Information
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Industry Forecast
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Industry Websites
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Glossary of Acronyms

Historical Profiles (PDF format)

04/29/2019
01/28/2019
10/22/2018
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10/16/2017
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10/10/2016
07/11/2016
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01/12/2015
10/13/2014
07/21/2014
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02/18/2013
11/12/2012
08/27/2012
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10/25/2010
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04/26/2010
01/25/2010