Who Are Sam‘s Club‘s Top Competitors? An In-Depth Analysis

Sam‘s Club is a retail powerhouse, generating around $80 billion in annual sales as one of the leading membership-based wholesale clubs in the U.S. Along with competitors Costco and BJ‘s Wholesale, Sam‘s Club pioneered the warehouse club model, offering customers bulk quantities of a wide variety of goods at discounted prices.

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However, the retail landscape is rapidly evolving, and Sam‘s Club faces intense competition from multiple fronts. As a retail industry analyst and a notoriously picky shopper myself, I‘ll break down the key players vying for Sam‘s Club‘s customers and market share.

Sam‘s Club Overview

First, let‘s look at some quick facts about Sam‘s Club:

Owned by Walmart Inc., world‘s largest company by revenue
Founded in 1983 and named after Walmart founder Sam Walton
600 stores across 44 U.S. states and Puerto Rico
Around $80 billion in annual net sales (FY2022)
Over 50 million members as of 2022
Average store size around 134,000 square feet
Typical assortment of 2,200 SKUs (stock keeping units)

So Sam‘s Club is a major player in the $500+ billion U.S. warehouse club sector. However, Sam‘s accounts for less than 15% of parent company Walmart‘s massive $570 billion in total revenue. This relationship creates some unique dynamics.

direct competitors

1. Costco Wholesale

Costco is the 800-pound gorilla of the wholesale club industry and Sam‘s Club‘s biggest direct competitor by far. Let‘s compare some key metrics between the two retailers:

Metric	Costco	Sam‘s Club
Revenue (FY2022)	$226.9B	$80.0B
Membership	118.9M	50M+
U.S. Stores	578	600
Avg. Store Size	146,000 sq ft	134,000 sq ft
SKU Count	~4,000	~2,200

As you can see, Costco handily beats Sam‘s Club on sales and membership while maintaining a similar store footprint. Costco‘s massive $227 billion in global revenue makes it the 3rd largest U.S. retailer behind only Walmart and Amazon.

Costco stores offer a wider selection, with nearly twice as many items on average. Costco also puts a huge emphasis on its Kirkland Signature private label brand, which accounts for roughly 25% of total sales.

Both chains have popular food courts, but Costco has a cult-like following for its $1.50 hot dog and drink combo. Costco remains a formidable foe for Sam‘s to contend with.

2. BJ‘s Wholesale Club

BJ‘s Wholesale is the smallest of the "big three" warehouse clubs, but still a significant competitor to Sam‘s. Some key stats on BJ‘s:

237 stores across 17 states in the Eastern U.S.
$18.5 billion in revenue for fiscal 2022
Around 6.5 million members
Stores range from 70,000-150,000 sq ft
Membership fees of $55-110 per year

While only around one-fourth the size of Sam‘s Club by sales, BJ‘s has a loyal customer base in its regional markets. BJ‘s accepts manufacturer‘s coupons (unlike Sam‘s or Costco), focuses more on fresh food, and offers a same-day delivery service.

3. Walmart Supercenters

In an interesting corporate twist, Sam‘s Club also competes with sister chain Walmart, the largest retailer in the world. Walmart Supercenters are the biggest threat:

3,500+ Supercenters across the U.S.
Average store size of 178,000 sq ft
Over 100,000 products per store
Account for vast majority of Walmart Inc.‘s $570B in annual sales

The key difference is that Walmart stores are open to the public with no membership requirement. This gives Walmart a much larger potential customer base than membership-based Sam‘s Club.

Many consumers choose to shop at Walmart to avoid paying club fees. However, Sam‘s typically offers lower unit prices for bulk purchases. Having both chains allows Walmart to capture different shopper segments.

4. Target

While Target doesn‘t operate on a wholesale club model, it increasingly competes with Sam‘s Club across key categories like grocery, apparel and home goods. Target quick facts:

1,900+ stores across all 50 states
Stores range from 15,000-130,000 sq ft
Generated $109.1B in revenue for FY2022

Target caters to a somewhat more affluent customer base and relies heavily on temporary promotions rather than EDLP (everyday low pricing). Target has heavily invested in grocery and small-format stores in recent years, directly attacking Sam‘s market share.

5. Amazon

Last but certainly not least on our list of top competitors is Amazon. The ecommerce giant is fundamentally disrupting traditional retail and drawing customers away from wholesale clubs to its online marketplace.

Consider these eye-popping Amazon stats:

168 million unique monthly visitors (U.S.)
153 million estimated U.S. Prime members
18% share of U.S. grocery ecommerce sales

Amazon Prime, at $139/year, offers member perks like expedited shipping, streaming video and exclusive deals. Sound familiar? Amazon has essentially created a digital version of the wholesale buying club.

As Amazon continues expanding into physical retail with concepts like Amazon Fresh stores and high-tech Amazon Go convenience stores, the company will only heighten its rivalry with Sam‘s Club.

Secondary Competitors

Of course, Sam‘s Club faces competitive pressure from a wide spectrum of other retailers, even if they‘re not direct rivals. These secondary competitors include:

Discount Stores: Chains like Dollar Tree, Dollar General and Five Below offer budget-conscious shoppers low prices on consumables and household items. As they expand their grocery offerings, discount stores can steal trips away from Sam‘s.
Warehouse Stores: Chains like Smart & Final, Gordon Food Service and Restaurant Depot have business models catering to small businesses and foodservice operators, overlapping with some of Sam‘s Club‘s core customers.
Category Specialists: Retailers like Best Buy (electronics), Home Depot (home improvement) and Staples (office supplies) go head-to-head with Sam‘s in their respective product categories. They may offer deeper assortments and specialized services.
Traditional Grocery: Walmart is the largest U.S. grocer, but chains like Kroger, Albertsons and regional players still attract consumers with convenient locations, weekly promotions and loyalty programs. Over 90% of Sam‘s Club stores have fresh food offerings.

The broader competitive field illustrates the challenge of succeeding in today‘s complex retail environment. Walmart CEO Doug McMillon sums it up well:

"We face stiff competition from every direction — physical stores, clubs, eCommerce, digitally native brands…you name it. We have to be sharp to compete effectively."

Competitive Outlook

So what does the future hold for Sam‘s Club and its rivals? Let‘s take a high-level view using a SWOT analysis:

Strengths:

Buying power/economies of scale as part of Walmart
Loyal high-income customer base
Strong private label and prepared foods business
Accelerating ecommerce and omnichannel capabilities

Weaknesses:

Weaker brand and smaller footprint than Costco
Lower membership fee revenue than competitors
Perception as less exciting shopping experience
Reliance on slow-growing categories like tobacco

Opportunities:

Potential to gain share as consumers focus on value
Expand new Dx digital experience stores and Scan & Go tech
Grow in underpenetrated markets and segments
Leverage Walmart assets for grocery delivery and pickup

Threats:

Amazon stealing members with Prime‘s convenience
Costco widening its competitive lead
Walmart cannibalizing sales, especially in grocery
Increasing costs and supply chain challenges
Declining store traffic as retail shifts online

Based on these dynamics, I predict wholesale clubs as a whole will continue to grow sales in the low single digits annually over the next five years. However, I expect that growth to trail the overall retail sector as discounters and online players take share.

To stay competitive, Sam‘s Club must double down on its most loyal customers with personalized offers and enhanced membership perks. It also needs to lean into its digital transformation to provide a more convenient omnichannel experience. Finally, Sam‘s has to further differentiate its merchandise assortment to give shoppers unique treasures they can‘t find elsewhere.

Retail success always comes back to knowing your customer better than anyone else. As a picky shopper myself, I‘ll keep watching to see which wholesale club gets my business in the long run. May the best retailer win!