Channel Strategies

One of the most memorable lines from the sitcom “Broad City” comes from the character Ilana, when she is explaining nightclub etiquette to her friend Abby. “In the club, we all fam,” she says.

A different kind of club has become popular among consumers: club stores.

Sujeet Naik, senior research associate at Coresight Research Inc., notes how club stores’ model have helped them appeal to consumers and lifted the channel in recent years.

“Club stores have maintained strong momentum in the post-pandemic years,” he says. “Retailers like Costco, Sam’s Club and BJ’s have seen steady sales growth, especially in their grocery businesses. Their low prices, bulk offerings and value-focused approach have continued to attract cost-conscious shoppers, despite food-at-home inflation remaining modest through 2024 and into 2025.”

Naik shares how the performance compares with some of club stores’ biggest rivals, such as grocery stores and mass merchandisers.

“Club stores have outperformed many traditional grocery stores and mass merchandisers in terms of sales growth and customer traffic,” he states. “While mass retailers like Walmart are still strong, many supermarkets are seeing more pressure on margins and footfall.”

He points to the Coresight’s Market Navigator report published last year, which delved into the channel share within the U.S. grocery segment. The report notes that supermarkets and convenience stores remained the dominant channel throughout 2023 and into 2024.

“However, it should be noted that, over the past few years, non-traditional grocery retailers have steadily siphoned sales from traditional food retailers, a trend we expect to continue moving forward,” the report says, according to Naik. “From 2017 through 2023, food retailers saw their share of total grocery market sales slip from 69.7% to 65.8% of sales, while major mass merchandisers saw their share increasing from 18.4% to 19.4% of sales and major discount and dollar stores (retailers that offer discounted merchandise across multiple departments) inched up from 3.1% to 3.5% of sales, according to Coresight Research analysis of U.S. Census Bureau data. At the same time, major warehouse clubs saw the greatest jump in sales share, moving from 8.7% to 11.3% of sales.”

Katie Hansen, senior analyst, retail and eCommerce at Mintel, Chicago, says that club stores performed strongly in 2024-25. Mintel data estimates net sales of $278 billion in 2025 and a year-over-year (YoY) growth rate of 4.3%.

“Looking ahead, Mintel projects an average annual growth rate of 3% for warehouse clubs from 2025 to 2029,” Hansen notes. “While this growth rate is steady, it trails behind competitors like mass merchandisers, which report $770 billion in sales in 2024, but experienced a slower growth rate of 2.9% from 2023 to 2024 (based on the latest Mintel data).”

The difference in growth dynamics can be attributed to the unique nature of club stores, Hansen says.

“Unlike mass merchandisers, grocery stores or other retailers, which are accessible to all consumers, club stores require a membership to shop,” she explains. “Additionally, not all shoppers have a need — or desire — to buy items in bulk, which limits their appeal to certain demographics. Despite these limitations, club stores remain a significant force in the retail landscapes.”

In fact, Hansen states that more than half of consumers (56%) currently hold a membership to a warehouse club, underscoring the value these retailers provide to their members.

She shares factors prompting consumers to opt for club stores when making their food and beverage purchases.

“Value is the primary driver to shop at club stores for 70% of consumers,” Hansen says. “Consumers are looking for retailers that can provide them with the most for each dollar they spend, particularly as uncertainty lingers around the impact of tariffs and inflation. Value will be composed of a variety of aspects: in addition to price, factors such as high-quality products, convenient shopping experiences, product variety and supportive customer service will enhance the value a retailer provides.”

She notes that club stores saw an uptick in foot traffic in late March and early April this year as consumers flocked to club stores to buy items in bulk prior to “Liberation Day” tariffs taking effect.

Earlier this year, the Acosta Group released a report titled “Club Warehouses Reap the Benefit of a Shift in Shopper Trends,” based on research from the company’s proprietary Shopper Community.

The report shows that club stores are a routine shopping destination for members, with visits being more frequent. It states that club stores meet many household needs, with 59% of club members making planned bulk stock-up trips at club stores in 2024.

Acosta’s report also highlights the value consumers are finding across various categories. It notes that natural and organic offerings have a broad appeal.

“Nearly half of club members purchase natural or organic groceries — especially older generations and parents of young babies,” the report says. “Fresh produce and dairy foods are the most popular.”

“Club stores are embracing emerging technologies and driving innovation in the retail industry to offer greater convenience and elevated experiences for shoppers.”

– Katie Hansen, senior analyst of retail and eCommerce at Mintel

According to the report, shelf-stable foods are the most broadly shopped, while fresh foods remain popular. It notes that 60% of club shoppers buy bottled water and a third do so exclusively.

Coresight’s Naik notes that consumers are choosing club stores for better value.

“Buying in bulk helps stretch their dollars, especially for families and frequent shoppers,” he says. “Club stores also offer a good mix of private-label and national brands, with quality products and convenient one-stop shopping experience.”

Naik also explains how loyalty plays a factor in shoppers and club stores.

“Shoppers pay a membership fee to shop at warehouse clubs, which inherently foster loyalty,” he says. “This creates a strong incentive for members to continue shopping there to maximize the value of their membership.”

Meanwhile, Mintel’s Hansen shares her thoughts.

“Consumers are loyal to their club store of choice: Mintel data shows that 66% of consumers who shop at club stores are loyal to their preferred club store over other retailers, increasing to 77% for Gen Z and 71% for millennials,” she says. “There is also quite a bit of pride in being a club store member, so much so that consumers will use/wear club store-branded items to show their affinity (47% overall, 56% Gen Z, 61% millennials).”

This shows that, once club stores capture a consumer’s business, they are likely to stick around, boding well for club stores’ future, Hansen adds.

The Acosta Group’s report notes that, although club members are loyal, they still shop around.

“Club members keep their membership year after year, but many belong to more than one club, appreciating the unique perks and exclusive products at each,” it says.

About two-thirds of club members have been renewed for more than three years, the report states, and more than half of Costco members have been with the club for at least five years. The report highlights that multiple club memberships are common.

“Half of club members belong to more than one warehouse club, seeking different product selections and perks,” it says. “BJ’s Warehouse has the most multiple memberships per household.”

Mintel’s Hansen shares how technology and eCommerce are impacting the future of club stores.

“Club stores are embracing emerging technologies and driving innovation in the retail industry to offer greater convenience and elevated experiences for shoppers,” Hansen says. “For example, Sam’s Club released its Scan & Go checkout technology, where consumers can sign into the Sam’s Club app and scan the barcodes of items they want to purchase as they shop the store. Once finished, pay for their cart via the app and show a digital receipt to the store employee waiting at checkout.”

This provides shoppers with convenience and allows them to get in and out on their own time, she states.

“We’re also seeing the use of AI [artificial intelligence], which can enhance personalization and the customer experience at the retailer (online or in-store),” Hansen says. “This is moving the club store experience from searching through giant warehouses of shelves to a more personalized, curated experience, which consumers are seeking throughout retail overall.”

Club stores also have partnered with delivery services, such as Instacart and Uber to offer same-day delivery options to consumers, keeping club stores competitive in the online shopping landscape, she explains.

“With Costco, for example, members receive a reduced annual Instacart+ membership for $79 (instead of the typical $99),” Hansen notes. “Not only do shoppers receive the benefits of Costco, but they can also then take advantage of the Instacart+ perks, such as Peacock Premium, further adding to the total value of paying for a Costco membership.”

Coresight’s Naik says that technology and eCommerce are helping club stores modernize.

“While they were slow to adopt digital tools, they are now investing in curbside pickup, same-day delivery and mobile apps,” he states. “Back-end tech like AI-driven inventory tools and smart pricing is also improving efficiency. However, in-person shopping still dominates for these retailers because the treasure-hunt experience and bulk sizing don’t translate well online.”

The Acosta Group’s report notes that digital channels offer convenience and deals through club stores.

“Club members turn to online shopping and digital apps to enhance their shopping experience,” it says.

The report states that online shopping offers an added level of convenience and facilitates deal-seeking.

“Over two-thirds of members have downloaded their club’s digital app, which most use to seek out the best deals through digital coupons, promotions and weekly specials,” it says. “Some members value alerts that notify them of promotions and deals.”

The report also shares recommendations for warehouse clubs and brands based on Acosta’s research. As shopping habits evolve, it says that there is a unique opportunity to enhance the member experience and drive loyalty.

One suggestion is for club stores to enhance digital convenience for time-strapped consumers.

“Digital checkout options and better delivery options can streamline the shopping experience and offer flexibility to members,” the report states. “Nearly half of Sam’s members prefer self-checkout, especially Gen Z. Scan & Go — where members scan items in their cart and pay through the Sam’s Club app — is gaining favorability.

“However, boomers still prefer standard checkout,” it continues. “DIY checkouts could further position Sam’s as a leader in digital checkout, but offering a blend of options ensures inclusivity.”

Acosta’s report also urges club stores to expand upon being a one-stop shopping experience.

“Continue to seek new ways to make warehouse clubs a destination for members’ lifestyle needs,” it says. “Increasing alerts through the app could drive higher awareness of special promotions pre-trip.”

The final suggestion from Acosta’s report is for club stores to adjust to new shopping behaviors with the right mix.

“Provide a variety of sizes to cater to routine shopping habits as bulk-buying declines,” it concludes. “Ensure the right mix of products that align with everyday needs. Feature a blend of national and private-label brands to meet diverse member expectation.”