Walmart-owned Sam's Club may be behind Costco in sales but they're looking to close the gap -- starting at the food court.
The membership-based warehouse chains have roughly the same number of clubs across the U.S., but Costco makes about twice as much annual revenue, according to CNBC. Per the report, net sales for Sam's Club totaled $86.2 billion in the most recent fiscal year, versus $176.63 billion for Costco.
Sam's Club started gaining ground on its competitor in 2022 when it undercut Costco's $1.50 hot dog-and-soda combo by 12 cents, offering a similar combo for just $1.38. The combo meal's sales jumped so much in the months after the price drop, it "generated a noticeable boost to profits," former Sam's Club CEO Kath McLay told Bloomberg.
Since then, the retailer has been making strides to offer Costco-beating deals as inflation-conscious consumers try to get the biggest bang for their buck and so far, it appears to be working. In Aug. 2023, Bloomberg reported that Sam's Club "opened up a lead over Costco in sales growth at stores open for at least a year, suggesting market share gains for the longtime No. 2."
Now, Sam's Club is taking another page out of Costco's book by trying to boost its Member's Mark private label goods to the level of Costco's Kirkland Signature, which has amassed a cult following over the past several years.
Sam's Club says Member's Mark includes exclusive products that have been "carefully crafted and thoughtfully sourced... with premium qualities like organic, fair trade, kosher, non-GMO, eco-friendly packaging and more," across multiple categories from grocery, home and seasonal to apparel, health, pets and baby.
"The club model survives because you have brilliant merchants focusing on creating or buying exceptional items," Sam’s Club CEO Chris Nicholas told CNBC. "Costco did such a great job of that over the years with Kirkland and we saw that be successful."
If Member's Mark continues to grow and gain popularity, it could definitely be the key to Sam's catching up to Costco. Member's Mark accounts for roughly 30% of sales at Sam's Club while Kirkland accounts for about 28% of Costco's annual sales, per CNBC.
Still, analysts say a takeover of Costco by Sam's Club is going to take a long time -- and a lot of hot dog combos.