Costco Wholesale Corporation is an American multinational retail company with over 800 warehouses in 13 countries. It was founded in 1983 and currently has headquarters in Issaquah, Washington. It attracts a high level of competition from Sam’s Club, Walmart, and BJ’s Wholesale in the market.
The official name of the corporation operating Costco stores is “Costco Wholesale”. However, it is most commonly known as simply “Costco”.
Costco’s most popular products are its “Kirkland Signature” brand name and its private label products, including food, electronics, clothes, jewelry, and much more.
As one of the largest retailers in the world, there’s no wonder Costco has a lot of competitors in the U.S and also globally. I would like to list out the 10 biggest competitors of Costco in this article!
- 1 Costco Competitors in 2022
- 1.1 List of 10 Biggest Competitors of Costco
- 1.2 FAQs
- 1.3 Who is Costco’s biggest competitor?
- 1.4 What differentiates Costco from its competitors?
- 1.5 Why is Costco better than competitors?
- 1.6 What is Costco’s competitive strategy?
- 1.7 How does Costco differ from other warehouse clubs?
- 1.8 What is Costco’s diversification strategy?
- 1.9 Conclusion
Costco Competitors in 2022
As of 2022, one can easily say that Sam’s Club is the biggest competitor to Costco without any doubt. Other top competitors include BJ’s Wholesale, Walmart, Aldi, Tesco, The Schwarz Group, Kroger, Home Depot, Target, Best Buy, Carrefour, etc.
Continue reading to find out why Costco attracts this much competition in the market and how it differentiates from its competitors!!
List of 10 Biggest Competitors of Costco
1. Sam’s Club
In the U.S., Sam’s Club is a competitor to Costco because of its similar business model and wide range of products available, which include electronics, food & beverage, jewelry & watches, health & beauty supplies, and other household items in bulk.
Both companies operate stores that offer consumers a no-frills shopping experience with a focus on selling in bulk.
Both companies offer wholesale prices on most of their products to members who pay their annual membership fees in order to shop at the stores.
Their prices are also similar and they both operate online platforms that offer customers even more savings.
In addition, Costco and Sam’s Club have almost the same number of physical stores across the country – as well as separate eCommerce sites where you can buy gift cards or shop online.
The difference between the two companies is that Costco has much higher membership fees—but it also offers lower prices thanks to its private-label products.
2. BJ’s Wholesale
Costco and BJ’s are both warehouse membership retailers, meaning they sell products in bulk to members at a discount.
Oftentimes these two companies will have the same exact product listed on their website for sale, but this isn’t always the case because Costco doesn’t sell every item that your local BJ’s carries.
They both have similar membership models, but Costco has more locations and higher renewal rates.
That’s not to say that BJ’s won’t continue to grow—it only means they may be a little behind in comparison.
In terms of pricing, there aren’t many differences in the products you buy at these two stores, but Costco is often less expensive.
However, when it comes to classic items like pillows and kitchen appliances, BJ’s offers better values than Costco.
BJ’s vs Costco may seem like a pretty cut and dry comparison. If you live on the East Coast, BJ’s is not as convenient as Costco and their prices are usually higher than Costco’s.
However, if you live in any other part of the country, especially in places where there are few Costco stores, BJ’s could be the better choice.
BJ’s has been a competitor to Costco for a long time, and there are many loyal customers who prefer one over the other.
The important thing to remember is that you need access to both in order to get the best deals on products from these retailers.
Costco is a membership-based business and people need to pay an annual fee in order to become its member.
This makes Costco customers less price-sensitive than Walmart’s customers who are not required to pay for membership.
As Costco has maintained a strong competitive position, it has been able to make significant profit margins and this has allowed it to provide more customer services and products.
This is one of the key reasons why customers prefer Costco over Walmart.
However, with its recent expansion strategy, Walmart is attempting to penetrate the value-conscious consumer segment in order to become a strong competitor of Costco and other competitors like Target and Aldi.
However, when it comes to grocery shopping, both Costco and Walmart offer great prices that can help you save money on everyday products.
But when it comes down to the final tally, take a hard look at your shopping list. Are you buying more than half of your items from bulk? If so, then Costco is likely the better choice.
Otherwise, you’ll save more money by shopping at Walmart instead of Costco.
The business model of Aldi is all about cheap prices, while Costco remains a warehouse club with an exclusive membership.
While Costco and Aldi are very different in terms of product variety, both stores have loyal customers who shop there frequently.
It’s difficult to say that one is better than the other because they cater to two totally different customer bases!
Aldi is great for families on a budget and those that want to save money when shopping.
Costco is great for people who enjoy the warehouse-style experience of shopping at a discount store and there’s something fun about filling your cart with bulk items!
Regardless of which you choose, both stores are providing value to their customers.
As they both are competing with each other in the market, we need to consider their annual revenues to get an idea of who stands where.
In 2021, Aldi generated total revenue of $121.1 billion whereas Costco earned $166.76 billion as of 2020. So, clearly, Costco is more successful than Aldi in the current market.
Tesco can be seen as a competitor to Costco since both are in the same retailing industry.
It is important to look at their business model and their business strategy in order to understand how they are different from each other.
Costco is basically a membership-only warehouse club that offers wholesale prices on most of its products.
In addition, Costco has a high average spending per customer per shopping trip due to the large number of products in the warehouse.
On the other hand, Tesco is a chain of supermarkets that offers their customers a wide variety of products at very affordable prices with high customer spending per shopping trip.
The revenue of Tesco is £64.7 billion while the revenue of Costco is $166.76 billion as of 2020. Moreover, Costco has a much higher profit margin than Tesco.
6. The Schwarz Group
The Schwarz Group is a global company that operates retail stores throughout the United States and Europe.
It employs more than 500,000 people worldwide and has over 12,900 stores in 33 countries.
It is a competitor of Costco because the company offers similar products and services
It is also a competitor of Walmart because it operates retail chains in Europe and America, like Walmart.
7. Home Depot
Home Depot, a renowned American home improvement retailer, is one of the best companies in the world that provides its customers with a wide range of home improvement products as well as services.
It has a huge number of stores in the US and its territories, Canada, and Mexico.
Home Depot’s first store was opened in 1978 by Bernie Marcus; Arthur Blank joined him soon after.
In 1981, Home Depot began its expansion from one small Georgia town to all of America, as well as into Canada.
Moreover, the company never fails to provide excellent customer service at every level from installation to repair; it goes an extra mile for customers’ satisfaction.
The war between Costco and Kroger is an interesting one. They are major players in the same market, but their strategies differ.
Their plans for future growth are also different, which gives them a competitive edge over each other.
It will be interesting to see how this battle evolves in the years to come.
Costco is known for its low prices, great memberships, and high-quality products. It has an excellent reputation in the market.
On the other hand, Kroger offers a wide range of products at a reasonable price. This is one of the reasons why it’s so popular among customers who are looking to save money without compromising on quality.
Both companies have a lot to offer, and they seem to be winning in their respective markets. It will be fascinating to see how the competition evolves between Costco and Kroger as time goes by.
Target is another top competitor to Costco in the U.S market and global market.
Both Costco and Target are considered to be great stores that have a lot of value for their customers. However, they each seem to appeal to different types of shoppers.
A shopper who is looking for the best deal will probably prefer Costco over Target, while someone who wants more variety in the products they can choose will probably prefer Target over Costco.
The bottom line is that these two stores have plenty of competitive advantages and disadvantages, but both seem to be performing well in the market compared to their competitors.
Lowe’s has put together a well-structured, forward-looking business model.
It is a competitor to Home Depot and Costco and has the potential to capture a large share in the market.
Lowe’s is a high-quality business with strong long-term prospects, which are reflected in its stock price.
Costco and Lowe’s, despite being in the same business, are very different companies.
Costco’s model is about delivering a less expensive product for its customers. The company offers memberships to customers and charges them an annual fee of $60 – $120 depending on their level of membership.
On the other hand, Lowe’s is a retail corporation that relies on its customers to purchase home improvement products.
The company sells both branded and private label items depending on the product category.
Both companies are very profitable with strong cash flow generation. However, Costco has a high revenue which is almost twice of what Lowe’s generated in 2020.
Who is Costco’s biggest competitor?
Sam’s Club is the biggest competitor of Costco followed by BJ’s Wholesale, Walmart, The Schwarz Group, Amazon, Tesco, Aldi, Lowe’s, Home Depot, and Target.
What differentiates Costco from its competitors?
Costco’s low price strategy differentiates it from its competitors Sam’s Club, BJ’s Wholesale, Walmart, and others. Ever since its inception, the company has been following the basic rule of not marking up regular items more than 14% over cost.
Why is Costco better than competitors?
It’s better than its competitors because of the membership-only business model that made it so popular in the retail market with a high level of customer retention rate (over 90%).
What is Costco’s competitive strategy?
Costco Wholesale has been following the cost leadership strategy for many years which gave it a competitive advantage over its rivals.
How does Costco differ from other warehouse clubs?
Costco always makes sure that it sells most of its items in bulk at low prices compared to other warehouse clubs in the United States like the Sam’s Club.
What is Costco’s diversification strategy?
Costco’s diversification strategy is to come up with a new product or offering in order to enter a new market. It is one of the strategies that made Costco so good, popular, and successful.
The top 10 competitors of Costco include Sam’s Club, BJ’s Wholesale, Walmart, Amazon, Target, Lowe’s, The Schwarz Group, Home Depot, Kroger, Aldi, and Tesco. Other biggest competitors are Dollar General, CVS, Argo, Walgreens, Menard’s, Best Buy, Five Below, Big Lots, Oh Polly, and Ollie’s Bargain Outlet.