Power Players Large-Format Value
There are those who argue that Costco doesn’t really belong in the same category as Wal-Mart and Target. While all three charge lower prices, hoping to make a profit with a huge volume of sales, warehouse clubs are able to insulate profits by charging annual membership fees, most of which drop right to the bottom line.
The wholesale warehouse club is not a crowded field, with Sam’s Club being the only other national chain and BJ’s Wholesale operating only along the Atlantic seaboard. With a 46.5 percent market share (compared with 38.4 percent for Sam’s Club) according to Euromonitor International, Costco dominates.
Target has packed away the Shops at Target concept and has returned to partnering with one designer at a time. These capsule collections better fit with the company’s overall strategy. “We have major plans to constantly surprise,” says Jeff Jones, Target’s chief marketing officer.
For those who use Wal-Mart as a barometer of consumer spending, the retailer’s performance has slowed recently. Wal-Mart’s sales and earnings in the first quarter rose about 1 percent, less than anticipated, as visits to stores declined 1.8 percent and same-store sales dropped for the first time since the summer of 2011.