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Sam’s is losing out to Costco, could react by selling more organics

Sam’s Club continues to struggle, but could outpace their primary competitor by relying on organic food sales.



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Costco is winning the discount race… for now

When you need to buy two dozen rolls of paper towels or five gallons of Mayonnaise, do you shop at Sam’s Club, or at Costco?

Recent first-quarter sales reports from the two wholesale buyer’s clubs indicate that Costco Wholesale Corp. is outshining Sam’s Club by significant margins. Sam’s Club, a wholesale division of Wal-Mart, saw a three percent drop in revenue and an 11 percent decline in operating income, while Costco’s sales increased by 4.4 percent, and revenue increased by eight percent.

What’s more, Sam’s Club reports its net sales at $13.5 billion, less than half of Costco’s, which hit $27.5 billion for the period ending February 15.

How Sam’s and Costco differ

Executives at Sam’s and business experts agree that the product selection at Sam’s simply isn’t as diverse or appealing as the merchandise stocking the shelves at Costco. Brian Yarbrough, an analyst at Edward Jones tells Bloomberg, there is a “stunning difference” between the products – and the profits – of Sam’s Club and Costco.

Costco’s private label, Kirkland Signature products, makes up 20 percent of total sales, while Sam’s stores brands have failed to generate such significant profits. Rosalind Brewer, president and CEO of Sam’s Club, also admits that Sam’s has “opportunities for improvement.”

The two brands enjoy different types of shoppers

The fact that Sam’s Club is declining while Costco continues to grow also reflects general trends in the retail economy, as well as the different customer bases of the two clubs. Sam’s lower-income customers are holding on to their cash in these meager times, while Costco can continue to count on its more affluent customers and small business owners to keep shopping.

According to Brewer, Sam’s merchandising teams will have to work hard on “bringing newness and trend-right merchandise into the clubs.” This is likely to include stocking the grocery section with more organic items, a move that might help Sam’s to attract a higher-income clientele and generate new interest in the club.


Ellen Vessels, a Staff Writer at The American Genius, is respected for their wide range of work, with a focus on generational marketing and business trends. Ellen is also a performance artist when not writing, and has a passion for sustainability, social justice, and the arts.

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  1. rob

    May 28, 2015 at 8:31 am

    I have memberships at both (this year) and I believe that this article fails to mention some aspects in this store comparison. I prefer Costco because it is cleaner, the staff smile more and seem to enjoy their jobs, the buggies and other equipment seem newer, the food court has better food, the staff is helpful and friendly, and it is a more comfortable environment to shop in. I tend to think that Costco might cost a little more, but the comfort level is well worth the extra cost. What other retail store can retain the same worker for eight years?

  2. CFB

    May 28, 2015 at 10:16 am

    Costco products are always top grade while Sam's aren't. The prices are often similar, although I can get some items at Sam's that are a little cheaper than Costco. I can buy gourmet foods on the cheap at Costco. Sam's doesn't sell that sort of thing. Sam's will often have one register open while 8-9 employees stand around near the customer service desk. I've gone to the food court and had the one guy working there be hiding in the back. If I return something at Costco, they often don't do more than ask what was wrong with it. At Sam's Club a return frequently is poorly received, requires a manager to approve or a department person to look the item over first. Its a lengthy and uncomfortable process. Once when checking out at Sam's Club, a boxed item was opened at the checkout "to make sure you didn't hide anything inside". Nothing like that has every happened to me at Costco.

    Products are a problem, the employees are a problem and the management of the stores are a problem. I still have a membership to both. Sam's Club basically gives memberships away for free, they do have some items Costco doesn't have, and Costco is always so busy I sometimes will just go to Sam's to avoid a crowd.

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Business News

Big retailers are opting for refunds instead of returns

(BUSINESS NEWS) Due to increased shipping costs, big companies like Amazon and Walmart are opting to give out a refund rather than accepting small items returned.



Package delivery people holding deliveries. Refund instead of returns are common now.

The holidays are over, and now some people are ready to return an item that didn’t quite work out or wasn’t on their Christmas list. Whatever the reason, some retailers are giving customers a refund and letting them keep the product, too.

When Vancouver, Washington resident, Lorie Anderson, tried returning makeup from Target and batteries from Walmart she had purchased online, the retailers told her she could keep or donate the products. “They were inexpensive, and it wouldn’t make much financial sense to return them by mail,” said Ms. Anderson, 38. “It’s a hassle to pack up the box and drop it at the post office or UPS. This was one less thing I had to worry about.” Inc., Walmart Inc., and other companies are changing the way they handle returns this year, according to a report by The Wall Street Journal (WSJ). The companies are using artificial intelligence (AI) to weigh the costs of processing physical returns versus just issuing a refund and having customers keep the item.

For instance, if it costs more to ship an inexpensive or larger item than it is to refund the purchase price, companies are giving customers a refund and telling them to keep the products also. Due to an increase in online shopping, it makes sense for companies to change how they manage returns.

Locus Robotics chief executive Rick Faulk told the Journal that the biggest expense when it comes to processing returns is shipping costs. “Returning to a store is significantly cheaper because the retailer can save the freight, which can run 15% to 20% of the cost,” Faulk said.

But, returning products to physical stores isn’t something a lot of people are wanting to do. According to the return processing firm Narvar, online returns increased by 70% in 2020. With people still hunkered down because of the pandemic, changing how to handle returns is a good thing for companies to consider to reduce shipping expenses.

While it might be nice to keep the makeup or batteries for free, don’t expect to return that new PS5 and get to keep it for free, too. According to WSJ, a Walmart spokesperson said the company lets someone keep a refunded item only if the company doesn’t plan on reselling it. And, besides taking the economic costs into consideration, the companies look at the customer’s purchase history as well.

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Business News

Google workers have formed company’s first labor union

(BUSINESS NEWS) A number of Google employees have agreed to commit 1% of their salary to labor union dues to support employee activism and fight workplace discrimination.



Google complex with human sized chessboard, where a labor union has been formed.

On Monday morning, Google workers announced that they have formed a union with the support of the Communications Workers of America (CWA), the largest communications and media labor union in the U.S.

The new union, Alphabet Workers Union (AWU) was organized in secret for about a year and formed to support employee activism, and fight discrimination and unfairness in the workplace.

“From fighting the ‘real names’ policy, to opposing Project Maven, to protesting the egregious, multi-million dollar payouts that have been given to executives who’ve committed sexual harassment, we’ve seen first-hand that Alphabet responds when we act collectively. Our new union provides a sustainable structure to ensure that our shared values as Alphabet employees are respected even after the headlines fade,” stated Program Manager Nicki Anselmo in a press release.

AWU is the first union in the company’s history, and it is open to all employees and contractors at any Alphabet company in the United States and Canada. The cost of membership is 1% of an employee’s total compensation, and the money collected will be used to fund the union organization.

In a response to the announcement, Google’s Director of People Operations, Kara Silverstein, said, “We’ve always worked hard to create a supportive and rewarding workplace for our workforce. Of course, our employees have protected labor rights that we support. But as we’ve always done, we’ll continue engaging directly with all our employees.”

Unlike other labor unions, the AWU is considered a “Minority Union”. This means it doesn’t need formal recognition from the National Labor Relations Board. However, it also means Alphabet can’t be forced to meet the union’s demands until a majority of employees support it.

So far, the number of members in the union represents a very small portion of Google’s workforce, but it’s growing every day. When the news of the union was first announced on Monday, roughly 230 employees made up the union. Less than 24 hours later, there were 400 employees in the union, and now that number jumped to over 500 employees.

Unions among Silicon Valley’s tech giants are rare, but labor activism is slowly picking up speed, especially with more workers speaking out and organizing.

“The Alphabet Workers Union will be the structure that ensures Google workers can actively push for real changes at the company, from the kinds of contracts Google accepts to employee classification to wage and compensation issues. All issues relevant to Google as a workplace will be the purview of the union and its members,” stated the AWU in a press release.

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Business News

Ticketmaster caught red-handed hacking, hit with major fines

(BUSINESS NEWS) Ticketmaster has agreed to pay $10 million to resolve criminal charges after hacking into a competitor’s network specifically to sabotage.



Person open on hacking computer screen, typing on keyboard.

Live Nation’s Ticketmaster agreed to pay $10 million to resolve criminal charges after admitting to hacking into a competitor’s network and scheming to “choke off” the ticket seller company and “cut [victim company] off at the knees”.

Ticketmaster admitted hiring former employee, Stephen Mead, from startup rival CrowdSurge (which merged with Songkick) in 2013. In 2012, Mead signed a separation agreement to keep his previous company’s information confidential. When he joined Live Nation, Mead provided that confidential information to the former head of the Artist Services division, Zeeshan Zaidi, and other Ticketmaster employees. The hacking information shared with the company included usernames, passwords, data analytics, and other insider secrets.

“When employees walk out of one company and into another, it’s illegal for them to take proprietary information with them. Ticketmaster used stolen information to gain an advantage over its competition, and then promoted the employees who broke the law. This investigation is a perfect example of why these laws exist – to protect consumers from being cheated in what should be a fair market place,” said FBI Assistant Director-in-Charge Sweeney.

In January 2014, Mead gave a Ticketmaster executive multiple sets of login information to Toolboxes, the competitor’s password-protected app that provides real-time data about tickets sold through the company. Later, at an Artists Services Summit, Mead logged into a Toolbox and demonstrated the product to Live Nation and Ticketmaster employees. Information collected from the Toolboxes were used to “benchmark” Ticketmaster’s offerings against the competitor.

“Ticketmaster employees repeatedly – and illegally – accessed a competitor’s computers without authorization using stolen passwords to unlawfully collect business intelligence,” said Acting U.S. Attorney DuCharme in a statement. “Further, Ticketmaster’s employees brazenly held a division-wide ‘summit’ at which the stolen passwords were used to access the victim company’s computers, as if that were an appropriate business tactic.”

The hacking violations were first reported in 2017 when CrowdSurge sued Live Nation for antitrust violations. A spokesperson told The Verge, “Ticketmaster terminated both Zaidi and Mead in 2017, after their conduct came to light. Their actions violated our corporate policies and were inconsistent with our values. We are pleased that this matter is now resolved.”

To resolve the case, Ticketmaster will pay a $10 million criminal penalty, create a compliance and ethics program, and report to the United States Attorney’s Office annually during a three-year term. If the agreement is breached, Ticketmaster will be charged with: “One count of conspiracy to commit computer intrusions, one count of computer intrusion for commercial advantage, one count of computer intrusion in furtherance of fraud, one count of wire fraud conspiracy and one count of wire fraud.”

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