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). PriceSmart, a US-based company, owns and operates warehouse clubs in Central America, South America, and the Caribbean.
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.
Products, Ops & Technology
Major products sold by warehouse clubs are groceries; drug, health, and beauty aids; prescription medicine; and electronics. Most products are available only in bulk quantity. Warehouse clubs may also have onsite gas stations, pharmacies, optical centers, or food courts.