Not only do the two U.S. giants fight for customers north of the border but they are also engaged in a fierce territorial battle in Mexico.
Although Sam’s is associated with Mexico’s largest retailer, Wal-Mart, recent data indicates that Costco is winning the war – by some margin.
On the surface there seems little to choose between the two. Memberships cost the same: 450 pesos for a individual (200 for an extra person at Costco and 175 pesos at Sam’s). The products they stock are not dissimilar. Prices are comparable.So why did Costco’s sales increase by 6.3 percent in 2013, while Sam’s number dropped by 4.4 percent?
One reason, analysts suggest, is that Sam’s has been unable to differentiate itself significantly from the Wal-Mart brand and has less appeal for the mid- to higher income customer. Costco is more focused on clients with deeper pocketbooks and offer a wider range of products for this market segment.
The numbers speak for themselves: Sam’s operates 156 outlets in Mexico and has nine million memberships. There are only 34 Costco stores in the country but they boast 3.5 million members.
Sam’s Club’s troubles in Mexico may be indicative of their recent experiences in the United States, where earlier this year the chain laid off 2,300 workers – about half of them salaried managers.