"Since the clubs stock a limited number of SKUs and since they cut the meat on premises, they demand the highest quality and trim it to the highest level." "The quality of their meat gives them an edge," said Michael Clayman, president of HHC Publishing, a Norwood, Mass.-based publisher of Warehouse Club Focus, a biweekly newsletter focusing on the warehouse club industry.
2, it'll be priced at a reasonable level."Ĭarrying a limited assortment of meats lets meat managers focus on quality - they can make sure the products meet their specifications every time, according to one club observer. 1 attribute," Jeff Lyons, Costco's vice president and general merchandise manager of fresh foods, told SN. Offering high-quality merchandise is another important part of the strategy, sources told SN. And, unlike supermarkets, clubs can count on business from restaurant operators, who buy large quantities. Supermarkets, which are open longer and stock a larger assortment of merchandise, require higher margins than warehouse clubs, industry watchers told SN.Īt clubs, the limited number of products, combined with quick turnover and added revenue from membership fees, allows clubs to operate with a lower gross spread. Indeed, supermarkets and members-only clubs work under different financial models. These operators also place less emphasis on customer service than traditional supermarkets. Now they take a small - but growing - bite out of supermarket meat departments, industry observers told SN.ĭuring recent visits to units of Costco, Sam's Club and BJ's Wholesale, SN observed a common merchandising strategy: Self-serve cases are limited to the most popular meat products, presented in jumbo-sized packages at highly competitive prices. Designed to increase the frequency of shopping visits, these additions have done that and more. A few short years ago, warehouse clubs created an exciting new destination for their members - meat and seafood departments.
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