Are millenials killing Costco and Sam’s Club?
Warehouse clubs such as Costco, Sam’s Club and BJ’s Wholesale Club have for decades been an American staple: a place where families can stock up on bulk items, try free samples and spend the better part of a weekend morning meandering through aisles filled with 26-packs of canned salmon and king-size mattresses. But as more of Americans’ buying shifts online, some retail analysts say warehouse clubs may largely be left behind.
“The core club customer is older: It’s generally someone with a family and a house,” said Sucharita Mulpuru, an analyst at the research firm Forrester. “Costco has been one of the least digitally forward companies out there. This segment has had its head in the sand when it comes to competing with Amazon.”
Warehouse retailers, she added, have been among the slowest to shift their business online, offer home delivery or make other sweeping changes to compete with the likes of Amazon.com.
There are signs that the sector is falling behind: Warehouse clubs and supercenters cut an average of 2,500 jobs each month in 2017, reversing a longtime trend of steady growth, according to a Washington Post analysis of Labor Department data. Between 2009 and 2016, warehouse stores had added an average of 3,000 workers each month.
“Today’s adults are not spending a lot of time shopping like my parents’ generation did,” said Kim Whitler, a marketing professor at the University of Virginia’s Darden Business School. “Gen X, Gen Y, Gen Z, they’re all time-starved and want to order groceries while they’re riding a bus to work.”
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