Walmart executive admits big mistake with Sam’s Club Member’s Mark as they face tough battle against Costco’s Kirkland brand

A WALMART executive has admitted that he is taking inspiration from Costco’s private label in Sam’s Club’s efforts to improve its Member’s Mark.

With Sam’s Club planning to open more stores this year, Walmart is looking to revitalize its flagship brand, Member’s Mark.

Chris Nicholas, CEO of Sam’s Club, revealed in a recent interview that the company has been closely monitoring Costco’s Kirkland Signature.

He pointed out that the key differences between Walmart’s wholesale club and the Costco brand are quality.

“The club model survives because there are brilliant dealers who focus on making or buying exceptional items,” he told CNBC.

“Costco has done a great job of doing this with Kirkland over the years and we’ve seen it be successful.”

Megan Cozier, chief buyer at Sam’s Club, helped spark efforts to improve product quality after she purchased an inflatable wading pool from Sam’s Club that began leaking after just a few uses.

Over the course of several years, Sam’s Club has combined over 20 of its private labels into a single brand, creating Member’s Mark.

The company aims to improve its food and commodity standards by 2025, for example by switching to antibiotic-free poultry and Fairtrade-certified coffee beans.

To ensure customers get what they want, Walmart has introduced a program that allows customers to provide feedback on flavors, designs and more before the goods even arrive in the store.

“They’re very demanding, like, ‘Hey, this seam isn’t good enough or this seam needs to be better or this needs to be double-stitched or there’s not enough lobster in your lobster mac (and cheese),'” Nicholas said.

The importance of private labels

Overhauling Member’s Marks is a crucial step if Sam’s Club wants to compete with Costco.

While both wholesalers operate the same number of clubs in the USA, Costco has twice the annual turnover.

In the last fiscal year, Sam’s Club had net sales of $86.2 billion, while Costco had net sales of $176.63 billion.

Customer interest in private label products has increased significantly in recent years, contributing to Costco’s success.

Between 2019 and 2023, sales of private label items increased by 34%, according to the Private Label Manufacturers Association’s annual report, conducted by market research firm Circana.

Michael Baker, retail analyst at DA Davidson, acknowledged that even after the restructuring, it will take some time for Sam’s Club to overtake Costco.

“Never say never,” he said. “Who knows? But I think it will take a long time.”

“TIME FOR A COSTCO MEMBERSHIP”

Although Sam’s Club has promised big changes, some customers are still dissatisfied with the wholesaler.

A Facebook user posted a photo of the store’s empty refrigerators and revealed that this was not the first time they had stopped working.

“Time for a Costco membership!” they joked.

In the comments, one person said that their local Sam’s Club had been remodeling their refrigerators over the past two months.

“Costco is my next stop too!” commented the buyer.

“Costco and BJ’s are the ones doing the business that Sam’s can’t do right now,” wrote another customer.

One person said that management at their local Sam’s Club had to throw out their meat because the refrigerators failed.

The US Sun has asked Walmart for comment.