Warehouse club

A warehouse club (or wholesale club) is a retail store, usually selling a wide variety of merchandise, in which customers may buy large, wholesale quantities of the store's products, which makes these clubs attractive to both bargain hunters and small business owners. The clubs are able to keep prices low due to the no-frills format of the stores. In addition, customers may be required to pay annual membership fees in order to shop.

This article refers to retail stores. For the famous Chicago nightclub, see Warehouse (nightclub).
Exterior of a Sam's Club warehouse club store (with the old logo) in Maplewood, Missouri, a suburb of St. Louis

Membership in a warehouse club superficially resembles that in a consumers' cooperative, but lacks key elements including cooperative ownership and democratic member control. The use of members' prices without cooperative ownership is also sometimes used in bars and casinos.

History
A BJ's Wholesale club in Virginia

In 1971, the Great Atlantic and Pacific Tea Company (A&P) opened their very first Warehouse Economy Outlet (WEO), a warehouse format that only lasted a few years.[1]

In 1976, Sol Price (who in 1954 founded FedMart, an early US discount store) and his son Robert Price founded Price Club in San Diego, as their first warehouse club.

In 1982, the discount pioneer John Geisse founded The Wholesale Club of Indianapolis, which he sold to Sam's Club in 1991.[2]

In 1983, James (Jim) Sinegal and Jeffrey H. Brotman opened the first Costco warehouse in Seattle.[3][4] Sinegal had started in wholesale distribution by working for Sol Price at FedMart.[5] Also in 1993, Costco and Price Club agreed to merge operations, after Price declined an offer from Sam Walton and Walmart to merge Price Club with Sam's Club.[6] Costco's business model and size were similar to those of Price Club, which made the merger more natural for both companies.[7] The combined company took the name PriceCostco, and memberships became universal, meaning that a Price Club member could use their membership to shop at Costco and vice versa. PriceCostco boasted 206 locations generating $16 billion in annual sales.[4] PriceCostco was initially led by executives from both companies, but in 1994, the Price brothers left the company to form Price Enterprises,[7][8] a warehouse club chain in Central America and the Caribbean unrelated to the current Costco.[9]

In 1983, Kmart's Pace Membership Warehouse (later sold to Sam's Club) started operations. That same year, Sam Walton opened the first Sam's Club on April 7, in Midwest City, Oklahoma.[10]

In 1984, former The Wholesale Club executives founded BJ's Wholesale Club, owned by Zayre.

In 1997, Costco changed its name to Costco Wholesale Corporation, and all remaining Price Club locations were rebranded as Costco.[4][7]

As of 2009, the three largest warehouse club chains operating in the United States are BJs, Costco, and Sam's Club.[11] BJ's Wholesale Club is one of the smaller competitors, with stores located primarily in the Eastern United States. Costco and Sam's Club are the largest chains. Costco has locations in seven other nations including Australia, Canada, Japan, Korea, Mexico, Taiwan, and the United Kingdom. Sam's Club, a division of Walmart, claims a membership base of 47 million persons and 602 stores across the United States (as of June 2019).[12]

Examples
  • BJ's Wholesale Club, operates in the U.S. only
  • City Club, operates in Mexico only
  • Costco, operates in the U.S., Canada, Mexico, the UK, Iceland, Australia, Spain, France, South Korea, Japan and Taiwan
  • Makro, operates in Europe, South Africa, Pakistan and other places; previously operated in the U.S., Venezuela & the Philippines.
  • PriceSmart, operates in Central America and Caribbean; previously operated in Asia-Pacific region
  • S&R Membership Shopping, operates in the Philippines only
  • Sam's Club, operates in the U.S., Mexico and other countries
  • Wholesale Club, operates in Canada only and Jamaica

Defunct
  • American Wholesale Club (1986–1989)
  • Buyers Club, a Denver-based independently owned chain
  • Club Wholesale, turned into office supplies stores, then folded
  • Fedco, bankruptcy in 1999 (most stores were bought by Target Stores)
  • GEM & GEX Membership Department Stores (required membership like a warehouse club)
  • Gemco, 1959–1986, owned by Lucky Stores
  • HomeClub, a home improvement warehouse, later became HomeBase and then folded in 2000
  • Max-Club, owned by SuperValu (United States)
  • PACE Membership Warehouse, owned by Kmart, merged with Sam's Club
  • Price Club, merged with Costco in 1993
  • Price Savers Wholesale Club, merged with PACE Warehouse Club, then merged with Sam's Club
  • Sam's Club, in Canada 2003–2009
  • SourceClub, owned by Meijer, from 1992 to 1994. Only had seven locations, all in Michigan, but helped loosen restrictions on who can become members industry-wide.
  • Super Saver, merged with Sam's Club (Southeast US)
  • The Wholesale Club, merged with Sam's Club
  • Titan Warehouse Club Inc., an early warehouse concept in Canada based in Calgary with locations in Toronto/Kitchener/Stoney Creek areas in the 1985–1994
  • Warehouse Club, was a public company

Alcohol sales without a membership in the U.S.

Many jurisdictions prohibit the discounting of liquor for promotional reasons, meaning that even in warehouse clubstores, members and non-members will pay the same price. Several examples in the United States are included below:

See also

References
  1. "A&P History". Groceteria.com. 6 April 2009. Retrieved 23 June 2019.
  2. "FindArticles.com - CBSi". Findarticles.com. Retrieved 23 June 2019.
  3. Chesley, Frank (June 6, 2007). "Biography of Jeffrey Brotman". Historylink.org. Retrieved February 20, 2012.
  4. "Why Become a Member". Costco Wholesale. Retrieved May 17, 2015.
  5. "Costco CEO's legacy continues as he steps down". Reuters. September 1, 2011. Retrieved 2018-02-05.
  6. Price, Sol; Helyar, John; Harrington, Ann (November 24, 2003). "Sol Price On Off-Price". Fortune.
  7. "Costco Wholesale Historical Highlights" (PDF). Costco Wholesale. February 12, 2009. Retrieved November 27, 2009.
  8. "Costco, Form SC 13E4, Filing Date Nov 21, 1994". secdatabase.com. Retrieved March 29, 2013.
  9. "PriceCostco Company History". FundingUniverse.
  10. "Sam's Club celebrates 25th anniversary with nationwide open house" (Press release). Sam's Club. April 10, 2007.
  11. "BJ's Smaller in Store Size but Mightier in SKU Count". Home Textiles Today. Reed Elsevier. July 20, 2009. Archived from the original on November 1, 2009. Retrieved October 28, 2009.
  12. "Walmart Corporate". Corporate.walmart.com. Retrieved 23 June 2019.
  13. "Alcoholic Beverages Control Commission". Mass.gov. Retrieved 23 June 2019.
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