Costco and Sam’s Club are among the largest warehouses in the United States. Both are membership-only stores with a vast selection of merchandise. While they have a similar business model, the choice of membership and store experience can vary greatly. Here’s a look at how Costco and Sam’s Club compare?
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How Do Costco And Sam’s Club Compare?
A deeper look into both companies reveals critical areas where they differ. While both are membership-only warehouse clubs, they have varying product selections, membership fee structures, prices and savings, employee benefits, and overall revenue.
Product Selection
Both Costco and Sam’s Club offer a wide range of products, but their inventory varies. Both companies focus on keeping prices low by buying merchandise in bulk and negotiating better deals with suppliers. Besides, both sell brand names and private label products.
Costco stands out with its focus on quality merchandise. The company sells products across various categories, including groceries, appliances, furniture, electronics, clothing, and home improvement.
Costco has about 4,000 SKUs (Stock Keeping Units) which isn’t that much compared to other big-box stores. It offers a limited selection of products in each category to make sure that it can offer the best prices. Costco also takes pride in its Kirkland Signature line, including everything from cashew nuts to motor oil.
Sam’s Club is yet to release its SKU count publicly. However, from its website and in-store experience, it’s clear that the retailer offers more products than Costco. The quality argument is also debatable because, although Sam’s Club sells name brands, it also has its aisles stocked with its brand, Member’s Mark. However, it doesn’t have as many private label products as Costco.
Membership Perks And Fees
To enjoy the low prices at Costco and Sam’s Club, you must become a member. Both have different membership fee structures, with Costco being the more expensive.
Below is a detailed breakdown of Costco’s membership fees:
- Executive Membership: $120/year
- Business Membership: $60/year
- Gold Star Membership: $60/year
All of its membership types are available at all Costco locations in the U.S. and include a free household card.
The Executive Membership is the most expensive and comes with the most perks. For instance, Executive Members get an annual 2% reward (in cashback) on qualifying Costco purchases, up to $1,000. Members can also enjoy benefits on select Costco Travel products and receive more significant savings on Costco Services.
Costco’s Business Membership is ideal for businesses that sell products or services and have a resale license. For an additional $60, business owners can add more cardholders (affiliates) to their membership. The Gold Star Membership is the most basic and is available for home and family use.
Sam’s Club has two types of memberships:
- Club Membership: $45/year
- Plus Membership: $100/year
The Plus membership is the most expensive and comes with the most benefits. For instance, Plus members get free shipping on most items sold online for ten addresses. Members also receive 2% cash back on qualifying products up to $500 per year.
Other benefits include fuel savings, complimentary membership, and add-on memberships at $40 for both types. For an extra $100, Plus members can benefit from early shopping hours. Sam’s Club members with Sam’s Club Mastercard receive a 1% cashback for Club members and 5% cashback on Plus members.
In January 2022, the company introduced a rewards currency in Sam’s Cash on Eligible Purchases. For instance, there’s a 5% cashback on fuel at gas stations, 3% at Sam’s restaurants, and a 1% cashback on other eligible products. Once you achieve $5000 in Sam’s Cash, you can redeem it at any Sam’s Club location.
Like Costco, Sam’s Club doesn’t discount individual memberships. However, military personnel can receive Gift Cards for creating a new Sam’s Club membership or renewing an existing one. Military membership covers active military personnel, service members in the National Guard and Reserves, veterans, and their spouses.
Product Prices and Savings
When it comes to product prices and savings, both Sam’s Club and Costco promise lower prices. However, the retailer you choose will depend on the type of products you’re looking for and your budget. Moreover, pricing is quite relative, and one might find that some products are cheaper at Costco while others cost less at Sam’s Club and vice versa.
For example, 128 ounces of Windex window cleaner is $11.42 at Sam’s Club and $16.09 at Costco. Also, note that both retailers have private label products, usually cheaper than name brands. It’s pretty difficult to say which store is more affordable overall. The best way to know for sure is to compare prices on specific items.
Several factors affect pricing, such as membership fees, location, and availability. The time of year also plays a role in how much you’ll pay for an item. For example, party supplies are typically cheaper at Sam’s Club around Halloween and Christmas.
As for savings, both Sam’s Club and Costco offer coupons and promo codes that help members save on groceries and other items. Unlike Costco, Sam’s Club has a price match policy. This policy means that if you find a lower price on an identical item at another store, Sam’s Club will match it.
Sam’s Club also features Instant Savings, which are discounts that members can access without coupons or promo codes. Instant savings are subject to valid dates and availability, limited to only five items per member. Costco’s Warehouse Savings lists items available at a discount for a limited time. Savings can go as high as $100 off on select items.
Customer Services
Apart from the physical products both stores offer, they also provide different services to their customers. For instance, Costco offers Curbside Pickup, allowing customers to order online and pick up their purchases in-store without leaving their cars. However, the service isn’t available at all locations.
While Costco charges $10 for curbside pickup on orders exceeding $100, Sam’s Club offers the service free to members on the Plus plan. Club members can access the service for a limited number of free picks per year.
Both retailers avail shipping services to members. Sam’s Club Plus members have access to free shipping on most items with no minimum order. Club members can only access free shipping on items marked with a free shipping tag.
Costco presents free shipping as part of its offers from time to time. However, it has several shipping methods that members can use, including a $3 delivery surcharge for grocery items marked 2-Day delivery and a $10 surcharge on items marked Cold and Frozen.
Both retailers guarantee satisfaction; however, they also have return policies. At Costco, you’ll receive a full refund on membership fees and on most products within 90 days. On the other hand, Sam’s Club offers a 90-day return policy on electronics, 30 days on commercial equipment and motorsport items, and 14 days on cell phones.
Wages And Employee Benefits
Costco employs 288,000 workers globally. The company provides competitive wages and offers good benefits to employees. U.S. employees can benefit from health insurance, 401(k) plans, and paid time-offs. The company introduced bonuses awarded twice yearly to long-tenured employees. Company promotions are based on job performance.
Like Costco, Sam’s Club also offers health insurance and 401(k) plans to eligible employees. Every year the company promotes 20,000 employees to positions with more responsibilities and higher pay. Sam’s Club also offers paid vacations, holidays, and bonuses to eligible employees. We can say that both retailers provide excellent employee benefits; however, Costco’s benefits may be more generous.
Company Revenue
Costco is a publicly-traded company under the stock symbol COST. For the 2021 fiscal year, the company’s revenue was $195.9 billion, up from $152.7 billion in 2019. Members’ revenue increased from $3.87 billion in 2021 to $3.35 in 2019.
On the other hand, Sam’s Club is a division of Walmart. The company doesn’t release its revenue figures, but through Walmart’s financials, we know that Sam’s Club’s net sales with fuel were $16.5 billion in 2021, up 8.5% from the previous year. Its net sales with fuel totalled $15.3 billion in 2021, an increase of 10.4% from 2020.
As of May 2022, Costco has a Market Cap of $490.47 billion, while Walmart, the parent company of Sam’s Club, has a market cap of $131.35 billion.
When considering which membership to choose, the company’s financial performance is an important metric. It helps to understand its ability to generate revenue, profit, and cash flow. Based on the information above, we can say that Costco is a more profitable company than Sam’s Club.
About Costco
Costco is a membership-only warehouse club that offers a wide selection of merchandise. The first Costco warehouse store opened its doors on September 15th, 1983, with James Sinegal and Jeffrey H. Brottman as the founders in Seattle, Washington. The company went beyond just selling bulk items and became a retailer that offers almost every product imaginable, from groceries to clothing to electronics.
As of 2022, Costco now operates 828 locations worldwide. Puerto Rico and the United States have 572 stores, 40 in Mexico, 105 in Canada, 29 in the United Kingdom, 16 in Korea, 14 in Taiwan, four in Spain, two in China and France, and 13 in Australia and one in Iceland. The company has stores spread across most States in the United States except for Wyoming, West Virginia, Maine, and Rhode Island.
Costco’s product offering mainly revolves around selling bulk merchandise at a discounted price. The company also offers services such as optical laboratories, auto buying programs, and vacation packages under Costco Travel.
To benefit from Costco’s services and low prices, customers must sign up for a membership. Currently, Costco offers three membership types: Executive, Business, and Gold Star.
About Sam’s Club
Founded by Sam Walton in 1983, Sam’s Club is a membership-only warehouse club and a subsidiary of Walmart. The main reason behind Sam’s Club was to enable small businesses to save money when purchasing merchandise in bulk. The company has its headquarters in Bentonville, Arkansas, and boasts more than 600 clubs in the U.S.
Sam’s Club operates in most U.S. states except Alaska, Massachusetts, Oregon, Rhode Island, Warwick, Vermont, and Washington. It also has 36 clubs in China, 166 in Mexico, and several others in Brazil.
Sam’s Club uses a limited item business model that only stocks a select number of items in each product category. Through this strategy, the company negotiates better deals with suppliers and passes on the savings to customers.
To shop at Sam’s Club, customers must sign up for a club membership. The company offers two membership types, namely Club and Plus. These plans provide members with instant savings and curbside pickup, among other benefits.
Which Is Better — Costco or Sam’s Club?
Membership options, products, services, and prices vary between Costco and Sam’s Club. When deciding, it’s essential to consider your needs and preferences. If you’re looking for low prices on bulk items, both retailers offer great deals. However, Costco is a better option if you’re interested in additional features and services.
Costco Pros
- 4% cashback on gas (up to $1,000 per year)
- Quality products
- Free household card
- Free shipping on some orders
- Generous return policy
- Competitive prices on tires
- Big savings for big families
Costco Cons
- Limited brand selection
- Often crowded
- High membership fee
- Long lines
Sam’s Club Pros
- Free shipping on most items
- Great selection of products
- Offers military discount
- No-risk 90-day return policy on electronics
- Cheaper membership fee
- Offers price matching
Sam’s Club Cons
- Fewer stores
- Operating under Walmart can be limiting
- Financial performance not as strong as Costco
Based on the information above, we can say that Costco is the better option for those looking for quality products, a generous return policy, and free shipping. Sam’s Club is a better choice for a more comprehensive selection of products and a lower membership fee.
FAQs
Does Walmart own Sam’s Club and Costco?
Sam’s Club is a subsidiary of Walmart, meaning that Walmart owns a controlling interest in the company. Costco is a publicly-traded company with no controlling interest held by any one entity. Both Sam’s Club and Costco operate as membership-based warehouse clubs.
Are Sam’s Club and Costco competitors?
Sam’s Club and Costco are competitors. Both have a similar business model of selling bulk items at discounted prices to members. Besides, both are membership-only clubs meaning they compete for the same customer base by offering membership deals and promotions.
Which came first, Costco or Sam’s Club?
Both companies came out in 1983, with Costco opening its dates on September 15th, 1983, and Sam’s Club on April 7th, 1983. The two companies have been locked in competition ever since.
Can you use a Costco membership at Sam’s Club?
It’s impossible to use a Costco membership at Sam’s Club or vice versa. The two companies aren’t affiliated, so memberships aren’t transferable. Members pay varying annual fees for both retailers to enjoy exclusive access to deals and savings on bulk items.
Can you use your Sam’s Club card at Costco?
You cannot use your Sam’s Club card at Costco or vice versa. Membership isn’t transferable between the two companies. Both retailers offer membership-only savings on bulk items to their respective members.
Do Costco and Sam’s Club take EBT?
All Costco and Sam’s Club stores accept EBT cards for payment. However, several restrictions apply to what can be purchased with EBT benefits. For example, you cannot use EBT cards to buy medication, Costco gas, pet food, alcohol, or tobacco at Costco. At Sam’s Club, you cannot use EBT cards to purchase vitamins, supplements, alcohol, or cigarettes.
Conclusion
Costco and Sam’s Club are both excellent choices for wholesale shopping, and they each have their unique perks. When deciding which membership club is right for you, consider what types of products you typically purchase in bulk and which store offers the best selection and price.
Consider each store’s location in relation to your home or business. If you live closer to a Sam’s Club than a Costco, or vice versa, that may be the deciding factor. Both clubs offer various membership options, so be sure to choose the best fit for your needs. Finally, remember that you can have the best of both by opting for a Costco and a Sam’s Club membership.
