Sam’s Club, owned by Walmart, is focusing on labels to compete with Costco.
Private labels. Costco’s Kirkland Signature is a good example.
For decades, the war between store-brand and name-brand products has raged. Many people would say that toilet paper, paper towels, and trash bags are similar, but what about clothing and specialty foods?
CNBC reports that Costco and Sam’s Club have roughly the same number of clubs in the U.S. but Costco generates about twice the revenue.
Cris Nicholas, CEO of Sam’s Club, told the media that “the club model is still alive because brilliant merchants are focused on creating or purchasing exceptional items.” Costco has done a fantastic job with Kirkland over the years, and we’ve seen that it was successful.
Catalogs highlighting the benefits of Costco membership show some of the most popular Kirkland Signature items, including dish detergent, laundry soap, and vitamins. The catalog also mentions that the Kirkland Signature line was launched in 1995.
The catalog states: “Our mission was to create an item that is of the same or better quality than the leading brand, at a lower cost, by controlling all aspects of its creation, such as packaging and transport.” It challenges consumers to compare Kirkland Signature with the brand-name equivalent.
Costco memberships are required for either Kirkland Signature products or Member’s Mark. Costco memberships cost $60 per year for the gold star level and $120 for executives. Sam’s Club charges $50 per year for the club level membership and $110 annually for plus.
CNBC reports that Member’s mark sales make up about 30% of Sam’s Club’s annual sales while Kirkland Signature makes up 28%.
The Sam’s Club website states that “Member’s Mark” products are exclusives, using top-quality materials and ingredients. They offer the best value and quality at member-only prices.
