Costco won't offer major perk Sam's Club and BJ's have

In the warehouse club store space, there are three main players:

• Costco
• Sam’s Club
• BJ’s Wholesale

Each of these clubs has its own loyal following, but all three are known for certain things:

• Low prices
• Bulk discounts
• Exclusive inventory you won’t find elsewhere

For this reason, it’s easy to make the case to join any of these warehouse club chains. But the reality is that you probably don’t need to join more than one.

After all, when it comes to household essentials, Costco, Sam’s Club, and BJ’s have a lot of overlap in inventory. You can turn to any of these stores to load up on products like toilet paper, eggs, and other items you use on a regular basis.

Still, many retail experts agree that of the three major warehouse club chains, Costco is the one that dominates.

Costco has more than 130 million members, compared to 50 million members at Sam’s Club and 6.5 million at BJ’s.

Still, in recent years, Costco has seen increased competition not just from Sam’s Club and BJ’s, but from other membership-type stores like Resco Food Service. And while upscale grocer Erewhon caters to a very different audience than Costco, it, too, has a membership program in place.

Costco memberships are the most expensive

Costco makes a point not to raise its membership fees too frequently. The company’s management team understands that its membership base largely consists of budget-conscious consumers looking to save money on everyday essentials and groceries. As such, Costco typically increases fees roughly every seven years.

Costco’s most recent membership fee hike happened roughly a year ago, at which point the cost of a Gold Star membership rose by $5 and the cost of an Executive membership went up by $10.

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Now, a Gold Star membership at Costco costs $65 a year, while the Executive membership costs $130.

By comparison:

• A basic Sam’s Club membership costs $50 per year, while a Plus membership costs $110.
• A basic BJ’s Club membership costs $60 per year, while a Club+ membership costs $120.

Because BJ’s has a considerably smaller footprint than its competitors, not every consumer who’s interested in joining a warehouse club store will have access to it. But for those looking to make a choice, it’s not unreasonable to base it on membership fees alone.

Costco is well aware that its membership fees are the highest among its competitors. So it needs to go the extra mile to win over customers in light of that.

Costco won’t offer major Sam’s Club and BJ’s perk

At a time when Costco faces increased competition, the company’s management team may need to think outside the box to boost its membership base. Yet there’s one perk Costco won’t budge on that its competitors offer — curbside pickup.

At Sam’s Club, curbside pickup is always free for Plus members. Regular Club members can get free curbside pickup on orders of $50 or more, or otherwise pay a $4 fee.

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At BJ’s, Club+ members always get free curbside pickup as well, while regular members get it for free on orders of $50 or more. Otherwise, there’s a $3.99 fee.

Offering curbside pickup could be a great way for Costco to offer its members even more value, all the while attracting new ones.

A lot of people find the process of shopping at a warehouse club store overwhelming. Curbside pickup helps people avoid crowds and save time, so it’s an important perk to offer.

But there’s a reason Costco has long held firm on its decision to not offer curbside pick. The company wants customers to enter the store.

As Costco CEO Ron Vachris said in a recent Wall Street Journal interview, “We love the phrase, ‘you came in for a rotisserie chicken and you spent $300.'”

Costco’s membership team makes an effort to keep the store’s inventory fresh and exciting so that members are tempted to come in and spend more.

In fact, Vachris and team often refer to the Costco shopping experience as a treasure hunt because they feel strongly that members who explore the store’s aisles can uncover many great deals at bargain prices.

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Curbside pickup, on the other hand, specifically keeps shoppers out of the store, and that’s not what Costco wants. So it’s unlikely that Costco will offer that benefit anytime soon, even if it’s a perk many people might appreciate. 

Maurie Backman owns shares of Costco.

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