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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.



costco samples

costco samples

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

Keep your company’s operations lean by following these proven strategies

(BUSINESS) Keeping your operations lean means more than saving money, it means accomplishing more in less time.



keeping operations lean

The past two years have been challenging, not just economically, but also politically and socially as well. While it would be nice to think that things are looking up, in reality, the problems never end. Taking a minimalist approach to your business, AKA keeping it lean, can help you weather the future to be more successful.

Here are some tips to help you trim the fat without putting profits above people.

Automate processes

Artificial intelligence frees up human resources. AI can manage many routine elements of your business, giving your team time to focus on important tasks that can’t be delegated to machines. This challenges your top performers to function at higher levels, which can only benefit your business.

Consider remote working

Whether you rent or own your property, it’s expensive to keep an office open. As we learned in the pandemic, many jobs can be done just as effectively from home as the workplace. Going remote can save you money, even if you help your team outfit their home office for safety and efficiency.

In today’s world, many are opting to completely shutter office doors, but you may be able to save money by using less space or renting out some of your office space.

Review your systems to find the fat

As your business grows (or downsizes), your systems need to change to fit how you work. Are there places where you can save money? If you’re ordering more, you may be able to ask vendors for discounts. Look for ways to bring down costs.

Talk to your team about where their workflow suffers and find solutions. An annual review through your budget with an eye on saving money can help you find those wasted dollars.

Find the balance

Operating lean doesn’t mean just saving money. It can also mean that you look at your time when deciding to pay for services. The point is to be as efficient as possible with your resources and systems, while maintaining customer service and safety. When you operate in a lean way, it sets your business up for success.

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Business News

How to apply to be on a Board of Directors

(BUSINESS) What do you need to think about and explore if you want to apply for a Board of Directors? Here’s a quick rundown of what, why, and when.



board of directors

What does a Board of Directors do? Investopedia explains “A board of directors (B of D) is an elected group of individuals that represent shareholders. The board is a governing body that typically meets at regular intervals to set policies for corporate management and oversight. Every public company must have a board of directors. Some private and nonprofit organizations also have a board of directors.”

It is time to have a diverse representation of thoughts, values and insights from intelligently minded people that can give you the intel you need to move forward – as they don’t have quite the same vested interests as you.

We have become the nation that works like a machine. Day in and day out we are consumed by our work (and have easy access to it with our smartphones). We do volunteer and participate in extra-curricular activities, but it’s possible that many of us have never understood or considered joining a Board of Directors. There’s a new wave of Gen Xers and Millennials that have plenty of years of life and work experience + insights that this might be the time to resurrect (or invigorate) interest.

Harvard Business Review shared a great article about identifying the FIVE key areas you would want to consider growing your knowledge if you want to join a board:

1. Financial – You need to be able to speak in numbers.
2. Strategic – You want to be able to speak to how to be strategic even if you know the numbers.
3. Relational – This is where communication is key – understanding what you want to share with others and what they are sharing with you. This is very different than being on the Operational side of things.
4. Role – You must be able to be clear and add value in your time allotted – and know where you especially add value from your skills, experiences and strengths.
5. Cultural – You must contribute the feeling that Executives can come forward to seek advice even if things aren’t going well and create that culture of collaboration.

As Charlotte Valeur, a Danish-born former investment banker who has chaired three international companies and now leads the UK’s Institute of Directors, says, “We need to help new participants from under-represented groups to develop the confidence of working on boards and to come to know that” – while boardroom capital does take effort to build – “this is not rocket science.

NOW! The time is now for all of us to get involved in helping to create a brighter future for organizations and businesses that we care about (including if they are our own business – you may want to create a Board of Directors).

The Harvard Business Review gave great explanations of the need to diversify those that have been on the Boards to continue to strive to better represent our population as a whole. Are you ready to take on this challenge? We need you.

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Business News

Average age of successful startup founders is 45, but stop stereotyping

(BUSINESS) Our culture glorifies (yet condemns?) startup founders as rich 20-somethings in hoodies, but some are a totally different type.



startup founders average age is 45

There’s a common misconception that startups are riddled with semi-nerdy, 20-something white dudes who do nothing but sip Nitro Brews and walk around the open office showing off the hoodie they wore yesterday. It turns out that it’s extremely rare that startup offices resemble The Social Network.

However, the academic backdrop for the real social network story (AKA Harvard), produced statistics that will serve to put the aforementioned misconception to rest. According to the Harvard Business Review, the average age of people who founded the highest-growth startups is 45. Say what?! A full-fledged adult?!

In fact, aside from the age category of 60 and over, ages 29 and younger were the smallest group of founders that are responsible for heading the highest-growth startups. I guess you can accomplish a lot when you’re not riding around the office on a scooter all day.

The study also found that older entrepreneurs are more likely to succeed. The probability of extreme startup success rises with age, at least until the late 50s. It was found that work experience plays an important role.

Many will argue, “Well, what about someone like Steve Jobs?” You could easily argue right back that it took Jobs until the age of 52 to create Apple’s most profitable product – the iPhone.

The study continues to answer questions like, why do Venture Capitalist investors bet on young founders? This goes back to the misconception at the start, and there’s a notion that youth is the key for successful entrepreneurship. Wrong.

There is also the idea that younger entrepreneurs are likely working with less financial options, so it may be common for them to take something from a VC at a lower price. As a result, they could be viewed as more of a bargain than older founders.

“The next step for researchers is to explore what exactly explains the advantage of middle-aged founders,” writes Pierre Azoulay, et al. “For example, is it due to greater access to financial resources, deeper social networks, or certain forms of experience? In the meantime, it appears that advancing age is a powerful feature, not a bug, for starting the most successful firms.”

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