Sam's Club improving quality of private label to compete with Costco's Kirkland

In a bid to close the gap with its chief rival Costco, Walmart-owned Sam's Club is intensifying efforts to enhance the quality of its private brand, Member's Mark. The revamp of the label is seen as crucial for Sam's Club as it expands its presence, with plans to open over 30 stores in the next four years. Inspired by Costco's success with Kirkland Signature, Sam's Club aims to follow a similar formula to boost its private label game and attract more customers. Sam's Club CEO Chris Nicholas highlighted the importance of Member's Mark in determining the club's future success, especially as it competes with Costco, which boasts similar numbers of U.S. clubs but significantly higher annual revenue. The shift towards private labels has become a trend among retailers like Kroger, Target, and Walmart, with a focus on offering unique flavors and exclusive items to attract customers. Sam's Club has consolidated its private labels under Member's Mark, with sales growth outpacing the rest of the store. The appeal of warehouse clubs like Sam's Club is expanding beyond traditional boomer and Gen X shoppers to include a growing number of Gen Z members. The company has experienced a 68% increase in Gen Z membership over the past two years, as younger shoppers recognize the value of bulk buying. Sam's Club's success with younger members could pose a challenge to Costco, which has traditionally catered to a different demographic. Sam's Club's digital channels are also playing a significant role in driving engagement and customer satisfaction. With half of its members utilizing digital platforms, the club is focusing on providing a seamless and integrated online experience to enhance customer loyalty and attract new members. The evolving strategies of Sam's Club reflect a competitive landscape in the retail industry, where private labels and digital engagement are key factors in attracting and retaining customers.