Why do warehouse clubs require membership?

[barbitu8]

@meanoldman

As far as pricing goes, they are clearly undercutting retail on my liquor of choice. I drink Maker’s Mark. I prefer buying the 1.75L. At fairly much every retail store I find, they sell it for $45-48. At Costco, it is around $37.

Total Wine has the lowest prices for beer and wine. The hard stuff is in a different section which I don’t visit, but I would guess it also has the lowest prices there. In addition, it offers coupons about once a month for various amounts off the listed prices, depending on the item.

[asterion]

@Yeah

I think Kilez and Chief Pedant cited the most important reason for membership, to ensure a more profitable clientele.

According to an obit by Margalit Fox in the NY Times of 16 Dec 09, when Sol Price started FedMart in 1954, the membership cost $2 and was limited to government employees and their families. These are folks not particularly prone to shoplifting or bouncing checks. FedMart’s competitors included FedCo and SaveCo, both of which also required membership based on employment.

Price sold FedMart to a German big box retailer that ran it into the ground and then started the Price Club in 1974. It charged $25 for membership but was aimed at small business owners. However, it did not turn a profit until opening up membership to everyone. Requiring membership, even if open to everyone, still “keeps out the riff-raff” as pointed out by the Chief Pedant.

Eventually, the Price Club was bought out by Costco and Price went on to open PriceSmart membership stores overseas.

I think that one of the main contributors to the astounding low prices at Price Clubs was the buyers. I think they new a deal when the saw it.

Sam Walton said that he got as many ideas from Sol Price as from anyone in the business. He apparently like the FedMart name and he opened Sam’s Club after dining with Sol. There is a lot more copying than innovation in retailing.

I remember when there was a Price Club in Albuquerque. After the merger, I think they shut it down for a while before opening a Costco in the same area, if not the same location. My parents had a Price Club membership and I think they actually got it by piggybacking on the membership of my mother’s hair stylist. Eventually they got individual memberships to Costco and Sam’s Club.