More U.S. Consumers Turn to Warehouse Stores
Costco Sales Rise 8% Year-on-Year
As concerns over inflation are growing in the United States due to tariff policies, warehouse discount stores that offer low prices are gaining popularity.
According to the Financial Times (FT) on the 29th (local time), there has been a significant increase in the number of consumers visiting warehouse stores such as Costco, Sam's Club, and BJ's Wholesale Club, which sell large quantities of products at low prices.
To use these three stores, customers must pay an annual membership fee of $50 to $65 (approximately 69,000 to 90,000 won). There are also inconveniences, such as having to wait in long lines due to crowds and receiving little to no assistance from staff. However, as more consumers seek lower prices, these stores are experiencing a boom.
According to the report, on this day, Costco announced that its sales for the third quarter of the fiscal year (the three months ending on the 11th) increased by 8% year-on-year to $63.21 billion (approximately 87.2235 trillion won). This slightly exceeded the market estimate of $63.19 billion (approximately 87.1959 trillion won) compiled by market data provider LSEG. Earnings per share (EPS) also rose to $4.28, up from $3.78 in the same period last year. Same-store sales, excluding one-off factors such as changes in the number of stores and excluding gasoline and exchange rate fluctuations, increased by 7.9%, while online sales grew by about 16%.
Sam's Club's same-store sales for the first quarter of the fiscal year increased by 6.7% year-on-year, outpacing the growth rate of its parent company, Walmart. BJ's Wholesale Club's same-store sales for the first quarter of the fiscal year also rose by 3.9%.
In contrast, the latest quarterly same-store sales growth forecast for supermarket chain Kroger & Albertsons, compiled by Visible Alpha, was only about 2%. Sales at department stores such as Macy's even declined.
The boom in warehouse discount stores is attributed to the impact of inflation. U.S. consumer prices have risen by 26% compared to 2019, before the COVID-19 pandemic, and concerns over inflation have recently intensified due to the tariff policies of the Donald Trump administration.
FT reported, "Costco and BJ's Wholesale Club raised their membership fees last year, but the number of members continues to increase every year," adding, "Nine out of ten members chose to renew." Sam's Club also revealed that 80% to 90% of its profits come from membership income.
Warehouse discount stores are increasing their number of locations. Costco plans to open 15 new stores this year. BJ's Wholesale Club announced plans to open 25 to 30 new stores over the next two years, while Sam's Club will open 15 new stores each year for the time being.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
