During the Covid pandemic, Megan Crozier bought an inflatable pool from Sam’s Club to entertain her children, but it began leaking air after just a few uses. This incident spurred Crozier, chief merchant of the Walmart-owned membership club, to improve Sam’s Club’s private brand, Member’s Mark, to compete with Costco’s popular Kirkland Signature.
Sam’s Club aims to enhance its brand as it plans to open more than 30 stores over the next four years, some in areas with strong competitors like Costco or B.J.’s Wholesale. Net sales for Sam’s Club were $86.2 billion in its most recent fiscal year, compared to Costco’s $176.63 billion. Sam’s Club CEO Chris Nicholas acknowledged that Kirkland Signature inspired their efforts, highlighting Costco’s success in creating exceptional private label items.
Michael Baker, a retail analyst for D.A. Davidson, noted that surpassing Costco’s beloved private label won’t be easy but believes Sam’s Club can follow its formula. Kirkland’s diverse range of items has driven Costco’s membership sign-ups and renewals. Other retailers like Kroger, Target, and Walmart have also launched private labels, contributing to the diminishing stigma of store brands as inferior.
Sales of private labels increased 34% between 2019 and 2023, reaching $236.3 billion, according to the Private Label Manufacturers Association. This growth is crucial for clubs requiring membership fees, with Sam’s Club charging $50 annually and $110 for higher-tier memberships. Member’s Mark accounts for about 30% of Sam’s Club’s sales, while Kirkland represents around 28% of Costco’s annual sales.
Sam’s Club has consolidated its private labels under Member’s Mark and set new goals for food and merchandise standards to be achieved by 2025. The company also launched a program allowing customers to co-create Member’s Mark items by providing feedback on flavors, design, and more.
Myron Frazier, Sam’s Club senior vice president of private brands and sourcing, said the store brand aims to become a respected lifestyle brand, expanding into home categories like indoor furniture and small appliances. Popular new items include easy meals like chicken rotisserie bites and mix-and-match kids’ clothing sets.
Sam’s Club reported a record number of members for more than a year, with customer transactions rising 5.4% in the most recent quarter. Nicholas said sales growth of Member’s Mark has outpaced the rest of the store, and the brand’s popularity gives the club leverage to negotiate better prices and innovation from suppliers. Walmart finance chief John David Rainey credited Member’s Mark for driving high single-digit growth, indicating that product quality will determine whether this growth continues.
Since 2020, Member’s Mark has launched, tweaked, and upgraded more than 1,200 items, including the inflatable pool that sparked the brand’s overhaul. Crozier confirmed that the pool now works well and is a popular item at Sam’s Club.
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