These days, it seems like it's all the rage to purchase a membership at a company that provides exclusive discounts in return for shopping there. There are a lot of companies that operate on a members-only basis, not the least of which includes Costco. However, this isn't the only company out there that operates in this manner. More importantly, there are even more companies that don't necessarily work on a members-only basis, but are competitors in the sense that they sell similar items.
Below are 10 companies that are similar to Costco. Remember, you have to be a member to shop at Costco and the minimum cost for membership is $60 per year. There is also another membership tier that costs you $120 per year and offers you 2% cash back on all of your purchases there. While it's important to remember that all of the companies listed below are slightly different from Costco, they have a number of similarities. Not all of them are members only clubs, either. That being said, they definitely operate in a similar fashion when it comes to working on the foundation of saving people money while selling similar goods.
This global company started with a single store located in Essen, Germany back in 1961. At the time, it was a family-run organization as opposed to the international chain that it is today. Eventually, two sons took over their mother's business upon her death and eventually, the two of them split up because they didn't agree on how the business should be run. This effectively created two entirely different companies that eventually came back together to form what is known as Aldi in the present day.
Today, Aldi operates in more than 20 different countries around the world. By the same token, they currently have more than 10,000 stores in operation, with more stores being opened every week. In 2019, their revenue was $106.3 billion. The store sells mostly grocery items, although it does also sell some home goods and at times, even specialty items. The idea is to sell these items at a cost far below what many individuals would typically pay at other grocery chains.
This is usually accomplished by keeping the stores basic in terms of the way they look and designing all of them with the same floor plan. Similar to many other big box stores as well as members only locations like Costco, they buy items in bulk. Shoppers are then responsible for finding the items that are most appealing to them from a selection of displays that are typically placed either along the wall or in cases in the middle of the floor. The chain has also long claimed that their products are of higher quality than many of their competitors. They directly compete with Costco in the sense that they sell many of the same products and target a similar demographic.
What can't you buy through Amazon? In reality, there are some items that aren't as easy to get through Amazon (think certain grocery otems and wine). That being said, they have practically anything and everything you could ever imagine. It doesn't matter if you're looking for a new wardrobe, craft projects, home furnishing or items for your pet, they can be found here. Amazon is often the go-to place for people when they literally have no idea where to turn in order to buy something.
The truth is, if Amazon doesn't sell it (aforementioned wine excluded), you're probably going to have a difficult time finding it. Amazon has one other thing in their corner, too. You can shop all day long, right from the comfort of your own home. That's right, all you have to do is grab your laptop or your phone and you're a few clicks away from retail therapy paradise. That's the ultimate level of convenience. It's also enough to convince a lot of shoppers that they don't really need Costco or anyone else.
There is no question that Amazon has been dominating things in the online realm for years. As a matter of fact, their success has prompted other stores (such as Costco) to hire entire teams of people, just so they could develop their own online shopping departments. The thing is, Amazon usually has more price options and in many cases, they can get it to you faster than most others.
8. Home Depot
Again, you have another company that is very similar in the way that it operates to Lowe's, making it a direct competitor of Costco. In this particular case, you're talking about a company that did $151.2 billion in revenue in 2021. To get a better idea of just how big this corporation really is, it's important to realize that they have over 490,000 employees stretching over numerous stores planted in practically every community. In addition, they're constantly building new stores.
How are they a direct competitor with Costco? In addition to selling the same types of home improvement products that were already mentioned in the section on Lowe's, they also sell appliances. It just so happens that some of those very same appliances are also sold by Costco. It then becomes a direct head-to-head competition over who can actually offer the best price to consumers. Again, it's important to remember that Costco is a members-only store. That isn't the case with Home Depot. However, Home Depot is very similar to Costco in the sense that they typically offer items in bulk at a discounted price. When it comes to appliances, they even have a dent and ding section where people can purchase perfectly good appliances that might have a little dent here or there at a significant discount.
Kroger is a little bit different from the two stores that have been mentioned in the above paragraphs. They don't sell home improvement goods. Instead, they focus almost exclusively on grocery items and some personal care products that you would expect to find in virtually any grocery store. Furthermore, they're not a members-only store. However, they are quite similar to Costco in the sense that they directly advertise to individuals who are trying to find the goods they need at the lowest possible prices.
Kroger has been in business for decades but recently, they've been making a lot of headway by sort of reinventing themselves. They've recently started delivering groceries to households that normally can't get delivery services of any kind, typically because they are 10 or even 20 miles away from any major municipality. As a matter of fact, they now have refrigerated trucks that will deliver groceries within a 70 mile radius of any warehouse. In that particular sense, they are quite similar to Costco because they have built these massive warehouses where they store items in bulk. This allows customers to purchase those items at a significant discount. The best part is that they don't have to go through any membership process in order to do so. AS a result, they now do more business through online sales than Costco.
This is a French chain of supermarkets that has been steadily growing for the last few years. They currently have over 12,000 individual locations and they do business in more than 30 countries. At last reporting, they were doing business to the tune of $81.1 billion. While they may not yet have the same kind of revenue as Costco, they are definitely on target for surpassing them in the relatively near future, provided they continue to grow at the same rate.
They run a number of supermarkets, but their efforts don’t stop there. They have actually taken things to the next level by opening a series of convenience stores that sell many of the same products as their supermarkets, yet reach smaller communities where it simply wouldn’t make sense to build a major store. This store also has a strong online sales department and they deliver grocery orders to customers all over the globe.
5. BJ’s Wholesale Club
BJ’s is a close competitor to Costco. They offer many of the same products, although they have roughly twice as many products to choose from. The store also charges an annual membership fee that costs $55. They currently have about 500,000 members who can shop there. They also have more than 200 warehouses dotted throughout the United States. Interestingly, their warehouses are self-service. Shoppers go in, get what they need, scan their membership card and pay for items they ring up themselves. It’s all designed to provide the most dramatic reduction in purchase prices the store can offer.
Tesco has been in business since 1919. As one of the UK’s largest retailers, they have been dominating the grocery and home goods markets for decades. As a matter of fact, they are currently the third largest retailer of their type in the world. Their stores can be found across the UK and they are currently expanding into Africa and Asia.
Tesco has a membership card that offers additional discounts to consumers. However, you do not have to possess one of these cards in order to shop there. That being said, the cards do provide significant discounts to those who wish to use them. At times, the saving can be as much as 15%-20%.
Their are many reasons why people sometimes prefer to shop at Target instead of Costco. For starters, these stores tend to be easier to access because there are more of them. In addition, the company has a line of store-brand products that is arguably just as good as any name brand you can find. Their prices are sometimes a few dollars more on some items, but the quality is sometimes better, too. Target sells a little bit of everything. You can typically find grocery items at many of their stores, but you can also go shopping for furniture, electronics and even baby items.
Even during the early days of its existence, Wal-Mart was a force to be reckoned with. They were much smaller back then, but they still sold everything from clothing and electronics to home goods and pet supplies. At the time, grocery items were about the only things they didn't sell. When the Supercenters came into existence, all of that changed. Shoppers could then get their prescriptions filled, shop for new clothes and buy groceries for the week, all while having their car serviced.
It changed the face of retail. To this day, it's a huge factor. A Wal-Mart can be found in practically every neighborhood that has even a hint of being large enough to support it. In fact, it's still the go-to place for people who will openly tell you they don't even like shopping at Wal-Mart. Why? They have easy access, their prices are fair and you can get almost everything you need in a single shopping trip.
For those who are really rushed for time or don't enjoy the thought of making five stops to get what they need, this is a major benefit. They can simply pop into a Wal-Mart, get what they need, and move on. For that reason alone, the chain will continue to be a factor (and a major Costco competitor) for the foreseeable future.
1. Sam's Club
Sam’s Club and Costco sell almost exactly the same items across the board. It costs just slightly less to purchase a membership at Sam’s Club, at $56 for an annual membership. The interesting thing is that while the two stores sell the same items, people have a tendency to purchase most of their grocery items from Sam’s Club and then go to Costco in order to make major purchases such as appliances. Either way, you can find many of the same items. In most cases, the items are even comparably priced.
Written by Allen Lee
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