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At first glance, Costco and Sam's Club appear quite similar.
Taking a closer look uncovers several significant distinctions in the customer demographics of these two brands.
For example, Numerator data indicates wealthy urban shoppers are more likely to be members of Costco than Sam's Club.

At first glance, Costco and Sam's Club appear quite similar.

Both are sprawling warehouses stocked with palletized displays of bulk goods at bargain prices. Both charge an annual membership fee to access the deals. Both were directly inspired by pioneering businessman Sol Price 's original club stores.

Yet, upon closer examination of consumer information, significant distinctions become apparent in the demographic makeup of the customers for these two brands.

To begin with, the average Costco customer spends almost double what they would at Sam's Club annually and frequents the store over 50% more often, based on data from 2024. data as reported by the data analysis company Numerator.

A regular Costco customer tends to visit around 32 times annually and spends approximately $3,086 in total, whereas a usual Sam's Club visitor goes there roughly 20 times a year and spends about $1,583 over the course of a year, as reported by studies. Numerator.

When considering their total retail spending, Costco customers allocate approximately one-eighth of their money towards warehouse purchases. This figure stands out as being nearly 65% above the national average for the U.S.

That wallet share is a bit lower for the typical Sam's Club member, who spends about one in 12 of their dollars at wholesale clubs — still higher than the US average by about 13%.

Costco shoppers also tend to be wealthier — earning more than $125,000 household income on average — while Sam's Club shoppers tend to have more mid-range incomes of between $40,000 and $125,000. Even so, Sam's Club members are slightly more likely to be homeowners than Costco members, Numerator finds.

And while both chains are unsurprisingly popular in the suburbs, Sam's Club is more popular among rural households and Costco has more strength with city dwellers, according to Numerator.

The information shows that both store chains are similarly preferred by customers identifying as white. However, Walmart-owned Sam's Club has a slight edge with customers who identify as Black or Hispanic/Latino.

At the same time, Costco has gained exceptional popularity among Asian-identifying households, which are almost two times more likely to shop there compared to an average retailer.

Customers at Costco show significantly higher interest in organic products compared to those at Sam's Club.

Regarding age demographics, customers at Sam's Club tend to be somewhat older compared to those at Costco, although members from Generation X equally favor both retailers.

Gina Logan, an analyst from Kantar Retail, informed Business Insider that Generation Z and Alpha consumers are progressively finding club stores more appealing, potentially lowering the typical age of customers for these chains.

In 2024, Sam's Club made significant strides with the introduction of new AI-driven checkout systems and further innovations. launch of its inaugural new store in seven years .

Sam's Club also succeeded in acquiring the leading position. highest position for consumer contentment in retail From long-time champion Costco earlier this year.

Finally, both chains are observing an impressive beginning to 2025 , with visits up more than 7% from last year — double the increases for Walmart and Target — according to foot traffic data from Placer.ai .

Numerator's data indicates nearly half of American households shop at either Costco or Sam's Club at least once in the past year, underscoring that US shoppers love finding a good deal .

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In Canada, Costco caters to over 10 million members through approximately 100 warehouse locations. The country holds a special affection for Costco; notably, it boasts almost twice as many stores per person compared to the United States, with Canadian outlets proving more lucrative when considering total operational earnings. A significant number of loyal Canadian Costco customers frequently visit these locations and often feel strongly committed after purchasing their memberships.

Let's delve into what being a Costco member entails and examine the benefits offered at each membership level. Is the expense of a Costco membership justified based on how you live? Does the price tag match up with the advantages you'll get? We're going to uncover this soon.

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What is the process for obtaining and using a Costco membership?

Costco memberships can be utilized at any store worldwide, irrespective of your home country. To qualify for a membership, you need to satisfy these requirements:

18+ years old
Reside in a home where nobody presently holds a Costco membership
Possess a legally valid Canadian identification document or any paper that verifies your identity.

Comparing Costco membership tiers

Should you qualify for membership, you can select among three distinct levels, all offering particular benefits along with exclusive pricing structures. Below is a concise overview of every Costco membership category:

Gold Star

A Gold Star Costco Membership comes with up to two household cards ($65 CAD), which can be renewed yearly. It’s the simplest tier among the trio and lets you buy items from any Costco store.

If you like buying things in large quantities or want to get everything done with just one visit for all your household needs—from food staples to electronic gadgets—a Gold Star Costco membership could be an excellent choice for you and would probably justify the yearly fee.

Business

A Costco Business membership enables you to buy items for personal use, resell, or business purposes from any Costco outlet. Similar to the Gold Star membership, this option also has an annual charge of $65 CAD yet comes with additional benefits, including:

A free household card
Capability to include additional affiliate cardholders at a cost of $65 each.
Purchase for resale

Under this plan, members are required to supply Costco with the necessary resale details to utilize the purchase-for-resale benefit.

Regardless of whether you operate your own enterprise or work as a purchaser for an extensive organization, a Costco Business membership might be beneficial if you often acquire multiple products in large quantities for your business operations or consistently buy goods with the intention of reselling them.

Unforeseen medical expenses can accumulate rapidly, even within Canada’s healthcare framework. cost-effective health coverage to safeguard you and those dear to you

Executive

Ultimately, the Executive Membership represents the top level of Costco’s membership options and comes with an annual cost of $130 CAD. This price encompasses both the basic $65 membership fee along with a $65 enhancement fee, offering you access to:

A free household card
Each year, you'll receive a 2% reward on eligible Costco buys (please check terms and conditions).
Extra advantages and increased savings on Costco services (such as dental plans, identity theft protection, business health insurance, and more).
Additional perks with Costco Travel offerings

Among the three Costco membership levels, the Executive tier offers the greatest advantages. However, it's crucial to assess if the $130 yearly membership cost justifies the value it adds based on your individual requirements or business needs prior to signing up.

Other Costco membership perks

Did you know that Costco offers services beyond just purchasing items in large quantities?

Costco provides various exclusive benefits and services to their members, including car insurance, home insurance, identity theft protection, home loans, personal checks, self-storage facilities, as well as business and individual health insurance plans. Additionally, they offer comprehensive travel-related services. For entrepreneurs and small business owners, Costco has you covered with payroll and payment solutions. Don’t miss these other valuable offerings available at Costco:

Costco online shopping Costco provides an online shopping experience akin to those offered by numerous other e-commerce platforms. To browse and purchase from their extensive range of products and services, you need to create an account. Once registered, your Costco membership will be connected to your new online profile.
Costco Travel: If planning your upcoming cruise, vacation, or car rental, Costco’s range of travel booking services could be just what you need. Despite its strong track record, it's wise to explore other options for comparative pricing to ensure you get the best deal possible.
Costco Gasoline: Many Costco outlets offer fuel at prices typically 6 or 7 cents cheaper per litre compared to major gas stations. For those who fill up regularly, this savings could justify the price of your Costco membership.
Costco Pharmacy: Many Costco outlets feature a comprehensive pharmacy that provides an extensive range of health-related items and services. Costco members across all regions except for Prince Edward Island and Quebec can place prescription orders online and get them shipped directly to their residence.
Costco Optical: Many Costco stores also have an optical section. You aren't required to get your eyes checked at a Costco outlet to purchase eyeglasses or contact lenses.
Costco credit card: The warehouses of Costco only accept credit cards with the Mastercard logo. Costco members have access to the CIBC Costco Mastercard without an annual fee. This card provides up to 3% cashback on qualifying transactions.

Although Costco offers an impressively wide range of services, a membership would be worthwhile primarily if you can afford to purchase items in large quantities. We'll delve into whether a Costco membership generally yields a satisfying return on investment for your typical shopper.

Is it worthwhile to get a membership at Costco?

If Costco often serves as your go-to destination for groceries, household items, technology, and business supplies, then opting for a Costco Gold Star or Business membership would make perfect sense. Essentially, if you have a preference for purchasing in large quantities yet remain uncertain about reaching the spending threshold needed to justify an Executive membership, we strongly recommend choosing either a Gold Star or Business membership instead.

Clearly, the primary benefit of a Costco Executive membership lies in the 2% cashback reward; nevertheless, this cashback becomes advantageous solely if you naturally Spend sufficiently to get a worthwhile return. There’s no need to struggle by increasing your spending while shopping merely to justify the cost of an Executive membership.

Products that can recoup your cost of a Costco membership

If you're still unsure about whether a Costco membership offers good value, consider utilizing those items that could essentially offset the cost of your membership. They might encompass things like:

Tires: It’s possible you're overpaying for tires when purchasing them outside of Costco. The pricing on tires within the Costco warehouse club is quite advantageous. By choosing to buy from Costco, you could save as much as $80 on specific tire models, potentially offsetting the cost of your Costco membership effortlessly.
Guarantees: Costco’s satisfaction assurance makes shopping at their warehouses even more appealing, potentially covering the expense of your membership fee entirely. Should you find yourself unhappy with your Costco membership, they will provide a complete reimbursement.
Gas : Refueling at Costco gas stations will assist you. save money on gas Visiting one of its gas stations several times each month could accumulate sufficient savings to cover your Costco membership fee.
Wine: Your typical savings when purchasing wine from Costco would amount to roughly $5 per bottle. Buying a dozen bottles each month could cover the cost of your Costco membership fee all by itself.
Movie tickets: Costco might offer you two movie tickets for almost half the price compared to buying them directly at the theater. For those who frequently enjoy watching movies, these savings can accumulate to more than cover the cost of your membership fee.

Enjoy additional perks with the CIBC Costco Mastercard

Curious about extra perks available? The CIBC Costco Mastercard, designed specifically for Costco members, offers added bonuses. Regardless of whether you're a Gold Star, Business, or Executive member, this card allows you to earn rewards not just on Costco buys but also elsewhere. You'll get 3% cashback on dining establishments and Costco fuel, 2% cashback at other service stations, EV chargers, and Costco’s online store, plus 1% on all remaining purchases made both inside and outside Costco.

If you're not interested in the CIBC Costco Mastercard, there are several other excellent alternatives available. Credit cards that work best for shopping at Costco .

Possible return on spending

To figure out if a Costco membership offers good value for the yearly cost, we'll have to assess how much money you could save. For a clearer picture of your potential savings, consider this estimated return on investment: one year As a board member utilizing the CIBC Costco Mastercard:

$4,200 CAD = Number of trips to Costco $84 annual cash back)
$3,500 CAD = dining establishments/food venues ( $105 annual cash back)
$2,100 CAD = fuel $42 annual cash back)
$8,800 CAD = various items ( $58 annual cash back once you've spent $3,000)

These yearly forecasts mirror the typical Canadian's expenditure patterns across various categories. Simply put, an Executive tier membership is worth it if you’re spending a minimum of $3,000 annually on Costco visits.

What truly matters most is what's best for you.

In the end, it's crucial to take some time and determine your yearly expenses prior to getting a Costco membership, particularly one of the higher tiers such as the Executive membership. Should your estimates indicate that you'll probably reach the threshold needed to justify the annual costs and you often purchase items in large quantities, then a Costco membership might turn into a smart financial choice for you.

If you're a fan of Costco and trust its business model, it might be worthwhile to consider investing. buy Costco stock Its payouts could cover your membership fees.

This article Is a Costco membership truly justified? Canadians desire stores to simplify purchasing domestically produced goods. originally appeared on Money.ca

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