Will millennials kill Costco and Sam’s Club?
THERE’S a Costco to one side of Gwendolyn Hammer’s house and a Sam’s Club to the other. But when the 28-year- old needs 12packs of paper towels, or 36 rolls of toilet paper, she heads online instead.
Once a month she uses her smartphone to place a bulk order on Boxed.com, a website founded five years ago as a millennial-friendly alternative to warehouse wholesalers. There is no membership fee, and most orders arrive within two days. Other times, she stocks up using Amazon Prime.
“I’ve never had a Costco membership, even though I knew shopping there would likely end up saving me money,” said Hammer, who lives in Utah Valley, Utah, and grew up shopping at Costco with her parents. “I do like not having to haul my kids to the store.”
Warehouse clubs such as Costco, Sam’s Club and BJ’s Wholesale Club have for decades been an American staple: A place where families can stock up on bulk items, try free samples and spend the better part of a weekend morning meandering through aisles filled with 26-packs of canned salmon and king- size mattresses. But as more of Americans’ buying shifts online, some retail analysts say warehouse clubs may largely be left behind.
“The core club customer is older: It’s generally someone with a family and a house,” said Sucharita Mulpuru, an analyst at the research firm Forrester. “Costco has been one of the least digitally forward companies out there. This segment has had its head in the sand when it comes to competing with Amazon.”
Warehouse retailers, she added, have been among the slowest to shift their business online, offer home delivery or make other sweeping changes to compete with the likes of Amazon.com. (Jeffrey P. Bezos, the founder and chief executive of Amazon, owns The Washington Post.)
There are signs that the sector is falling behind: Warehouse clubs and supercenters cut an average of 2,500 jobs each month in 2017, reversing a longtime trend of steady growth, according to a Washington Post analysis of Labour Department data.
Between 2009 and 2016, warehouse stores had added an average of 3,000 workers each month.
The sector received more bad news this month, when Walmart announced it would close 63 Sam’s Club stores, affecting an estimated 10,000 workers.
In a tweet, the company said the closures would help “better align” its physical locations with its strategy. ( Ten locations will reopen as e- commerce fulfilment centres.) — WP-Bloomberg