Skip to main content

An interesting development in warehouse club comps

12/1/2011

A funny thing happened on the way to Costco reporting a 6% increase in November same-store sales.


The warehouse club operator noted that sales in the electronics area increased in the high single digits and, in a reversal of prior year trends, attributed the gain to higher average selling prices as opposed to strong unit volume. In fact, unit volumes of televisions declined, but the drop was offset by strong sales of pricey big screen LED models as opposed to the prior year when sales were still dominated by LCD and plasma models that were experiencing deflationary pricing.


Whether Sam’s Club experienced a similar phenomenon depends on if it had the inventory in place to capitalize on demand among its affluent shoppers for LED models or if it continued to chase sales of LCD and plasma models where prices again hit new lows this year. For example, on Black Friday Walmart offered a 40-inch Emerson LCD for $248 and a 32-inch Emerson for $188.


Aside from the trends in the electronics space, Sam’s Club likely experienced favorable trends in other aspects of its business which tend to mirror the performance of Costco. For example, Costco noted that comps in the food and sundries and softlines categories increased in the high single digits. Gas was also an area of strength and if included in Costco comp calculations the figure was 9% instead of 6% as the average selling price of gallon was $3.44 this year compared to $2.85 last year.


As for areas where Costco was strongest, it highlighted Texas, California and the Midwest. Sam’s has it highest concentration of clubs in Texas so it is noteworthy that Costco single out that state as an area of outperformance.


Costco ended the period with a total of 596 clubs globally, including 433 in the United States and Puerto Rico compared to Sam’s Club 610 domestic units.

X
This ad will auto-close in 10 seconds