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Warehouse club

Warehouse club

Overview
A warehouse club is a retail
Retailing
Retail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...

 store, usually selling a wide variety of merchandise
Merchandising
Merchandising is the methods, practices, and operations used to promote and sustain certain categories of commercial activity. In the broadest sense, merchandising is any practice which contributes to the sale of products to a retail consumer...

, in which customers are required to buy large, wholesale
Wholesale
Wholesaling, jobbing, or distributing is defined as the sale of goods or merchandise to retailers, to industrial, commercial, institutional, or other professional business users, or to other wholesalers and related subordinated services...

 quantities of the store's products, which makes these clubs attractive to both bargain
Bargaining
Bargaining or haggling is a type of negotiation in which the buyer and seller of a good or service dispute the price which will be paid and the exact nature of the transaction that will take place, and eventually come to an agreement. Bargaining is an alternative pricing strategy to fixed prices...

 hunters and small business owners. The clubs are able to keep prices low due to the no-frills
No frills
No-frills or no frills is a term used to describe any service or product for which the non-essential features have been removed to keep the price low. The use of the term "frills" refers to a style of fabric decoration...

 format of the stores. In addition, customers may be required to pay annual membership fees in order to shop.

The concept is similar to the consumers' cooperative
Consumers' cooperative
Consumer cooperatives are enterprises owned by consumers and managed democratically which aim at fulfilling the needs and aspirations of their members. They operate within the market system, independently of the state, as a form of mutual aid, oriented toward service rather than pecuniary profit...

 supermarkets found in Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...

, though using bigger stores and not co-operatively owned.
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Encyclopedia
A warehouse club is a retail
Retailing
Retail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...

 store, usually selling a wide variety of merchandise
Merchandising
Merchandising is the methods, practices, and operations used to promote and sustain certain categories of commercial activity. In the broadest sense, merchandising is any practice which contributes to the sale of products to a retail consumer...

, in which customers are required to buy large, wholesale
Wholesale
Wholesaling, jobbing, or distributing is defined as the sale of goods or merchandise to retailers, to industrial, commercial, institutional, or other professional business users, or to other wholesalers and related subordinated services...

 quantities of the store's products, which makes these clubs attractive to both bargain
Bargaining
Bargaining or haggling is a type of negotiation in which the buyer and seller of a good or service dispute the price which will be paid and the exact nature of the transaction that will take place, and eventually come to an agreement. Bargaining is an alternative pricing strategy to fixed prices...

 hunters and small business owners. The clubs are able to keep prices low due to the no-frills
No frills
No-frills or no frills is a term used to describe any service or product for which the non-essential features have been removed to keep the price low. The use of the term "frills" refers to a style of fabric decoration...

 format of the stores. In addition, customers may be required to pay annual membership fees in order to shop.

The concept is similar to the consumers' cooperative
Consumers' cooperative
Consumer cooperatives are enterprises owned by consumers and managed democratically which aim at fulfilling the needs and aspirations of their members. They operate within the market system, independently of the state, as a form of mutual aid, oriented toward service rather than pecuniary profit...

 supermarkets found in Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...

, though using bigger stores and not co-operatively owned. The use of members' prices without co-operative ownership is also sometimes used in bars and casinos.

History


Sol Price
Sol Price
Sol Price was the founder of FedMart and Price Club . He is considered a pioneer of the "warehouse store" retail model....

 founded FedMart
FedMart
FedMart was a chain of discount department stores started by Sol Price, who later founded Price Club. His first location in San Diego, California was in a converted airport hangar. It was originally a discount department store open to government employees, who paid a membership fee of $2 per...

 in 1954, an early US discount store. Sol and his son Robert Price founded Price Club
Costco
Costco Wholesale Corporation is the largest membership warehouse club chain in the United States. it is the third largest retailer in the United States, where it originated, and the ninth largest in the world...

 in San Diego in 1976 as the first warehouse club. In 1982 discount pioneer John F. Geisse
John Geisse
John F. Geisse was the founder of Target Stores and a major retail pioneer. He was inducted by his peers into Discount Store News Discount Hall of Fame in 1984. for being the author of the Better Quality Upscale Discount Store Concept in AmericaDuring his retailing career, Geisse launched three...

 founded The Wholesale Club of Indianapolis, which he sold to Sam's Club in 1991.

In 1983, Costco Wholesale
Costco
Costco Wholesale Corporation is the largest membership warehouse club chain in the United States. it is the third largest retailer in the United States, where it originated, and the ninth largest in the world...

, PACE Wholesale Club
Kmart
Kmart, sometimes styled as "K-Mart," is a chain of discount department stores. The chain acquired Sears in 2005, forming a new corporation under the name Sears Holdings Corporation. The company was founded in 1962 and is the third largest discount store chain in the world, behind Wal-Mart and...

 and Sam's Club started operations. BJ's Wholesale Club
BJ's Wholesale Club
BJ's Wholesale Club, Inc. , commonly referred to simply as BJ's, is a membership-only warehouse club chain operating on the United States East Coast, as well as in the state of Ohio...

 was started in 1984 by former The Wholesale Club executives and owned by Zayre
Zayre
Zayre was a chain of discount stores that operated in the Northeastern, Southern and Midwestern United States from 1956 to 1990. The company's headquarters was in Framingham, Massachusetts. In 1988, the Zayre department stores were sold to the parent company of the competing Ames chain, and Zayre's...

.

, four warehouse club chains operate in the United States. Costco and Sam's Club
Sam's Club
Sam's Club is a chain of membership-only retail warehouse clubs owned and operated by Wal-Mart Stores, Inc., founded in 1983 and named after Wal-Mart founder Sam Walton. , the Sam's Club chain serves more than 47 million U.S. members...

 are the largest chains. Sam's Club, a division of Wal-Mart
Wal-Mart
Wal-Mart Stores, Inc. , branded as Walmart since 2008 and Wal-Mart before then, is an American public multinational corporation that runs chains of large discount department stores and warehouse stores. The company is the world's 18th largest public corporation, according to the Forbes Global 2000...

, claims a membership base of 47 million persons and 602 stores across the United States. Costco has locations in seven other nations including Canada, Mexico, the United Kingdom, Japan, Korea, Taiwan and Australia. BJ's Wholesale Club is one of two smaller competitors with stores located primarily in the Eastern United States. FedMart has survived as a small company owned by West Coast enterpriser Donald L. Kirk. In January 2009, Kirk announced plans to again expand FedMart; opening two new FedMart stores in 2009, in currently vacant former department store buildings; as well as opening an online FedMart Clearance/Closeout store.

Alcohol sales without a membership in the U.S.


Many jurisdictions prohibit the discounting of liquor for promotional reasons, meaning that even in warehouse clubstores, members and non-members will pay the same price. Several examples in the United States are included below:
  • Arkansas
    Arkansas
    Arkansas is a state located in the southern region of the United States. Its name is an Algonquian name of the Quapaw Indians. Arkansas shares borders with six states , and its eastern border is largely defined by the Mississippi River...

  • Arizona
    Arizona
    Arizona ; is a state located in the southwestern region of the United States. It is also part of the western United States and the mountain west. The capital and largest city is Phoenix...

  • California
    California
    California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...

  • Connecticut
    Connecticut
    Connecticut is a state in the New England region of the northeastern United States. It is bordered by Rhode Island to the east, Massachusetts to the north, and the state of New York to the west and the south .Connecticut is named for the Connecticut River, the major U.S. river that approximately...

  • Delaware
    Delaware
    Delaware is a U.S. state located on the Atlantic Coast in the Mid-Atlantic region of the United States. It is bordered to the south and west by Maryland, and to the north by Pennsylvania...

  • Hawaii
    Hawaii
    Hawaii is the newest of the 50 U.S. states , and is the only U.S. state made up entirely of islands. It is the northernmost island group in Polynesia, occupying most of an archipelago in the central Pacific Ocean, southwest of the continental United States, southeast of Japan, and northeast of...

  • Idaho
    Idaho
    Idaho is a state in the Rocky Mountain area of the United States. The state's largest city and capital is Boise. Residents are called "Idahoans". Idaho was admitted to the Union on July 3, 1890, as the 43rd state....

  • Indiana
    Indiana
    Indiana is a US state, admitted to the United States as the 19th on December 11, 1816. It is located in the Midwestern United States and Great Lakes Region. With 6,483,802 residents, the state is ranked 15th in population and 16th in population density. Indiana is ranked 38th in land area and is...

  • Iowa
    Iowa
    Iowa is a state located in the Midwestern United States, an area often referred to as the "American Heartland". It derives its name from the Ioway people, one of the many American Indian tribes that occupied the state at the time of European exploration. Iowa was a part of the French colony of New...

  • Massachusetts
    Massachusetts
    The Commonwealth of Massachusetts is a state in the New England region of the northeastern United States of America. It is bordered by Rhode Island and Connecticut to the south, New York to the west, and Vermont and New Hampshire to the north; at its east lies the Atlantic Ocean. As of the 2010...

  • Michigan
    Michigan
    Michigan is a U.S. state located in the Great Lakes Region of the United States of America. The name Michigan is the French form of the Ojibwa word mishigamaa, meaning "large water" or "large lake"....

  • Minnesota
    Minnesota
    Minnesota is a U.S. state located in the Midwestern United States. The twelfth largest state of the U.S., it is the twenty-first most populous, with 5.3 million residents. Minnesota was carved out of the eastern half of the Minnesota Territory and admitted to the Union as the thirty-second state...

  • Missouri
    Missouri
    Missouri is a US state located in the Midwestern United States, bordered by Iowa, Illinois, Kentucky, Tennessee, Arkansas, Oklahoma, Kansas and Nebraska. With a 2010 population of 5,988,927, Missouri is the 18th most populous state in the nation and the fifth most populous in the Midwest. It...

  • Nebraska
    Nebraska
    Nebraska is a state on the Great Plains of the Midwestern United States. The state's capital is Lincoln and its largest city is Omaha, on the Missouri River....

  • New Hampshire
    New Hampshire
    New Hampshire is a state in the New England region of the northeastern United States of America. The state was named after the southern English county of Hampshire. It is bordered by Massachusetts to the south, Vermont to the west, Maine and the Atlantic Ocean to the east, and the Canadian...

  • New York
    New York
    New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...

  • Ohio
    Ohio
    Ohio is a Midwestern state in the United States. The 34th largest state by area in the U.S.,it is the 7th‑most populous with over 11.5 million residents, containing several major American cities and seven metropolitan areas with populations of 500,000 or more.The state's capital is Columbus...

  • Texas
    Texas
    Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...

  • Vermont
    Vermont
    Vermont is a state in the New England region of the northeastern United States of America. The state ranks 43rd in land area, , and 45th in total area. Its population according to the 2010 census, 630,337, is the second smallest in the country, larger only than Wyoming. It is the only New England...

  • Virginia
    Virginia
    The Commonwealth of Virginia , is a U.S. state on the Atlantic Coast of the Southern United States. Virginia is nicknamed the "Old Dominion" and sometimes the "Mother of Presidents" after the eight U.S. presidents born there...



Examples

  • Costco Wholesale
    Costco
    Costco Wholesale Corporation is the largest membership warehouse club chain in the United States. it is the third largest retailer in the United States, where it originated, and the ninth largest in the world...

    , operates in the U.S., Canada, UK and other countries
  • Sam's Club
    Sam's Club
    Sam's Club is a chain of membership-only retail warehouse clubs owned and operated by Wal-Mart Stores, Inc., founded in 1983 and named after Wal-Mart founder Sam Walton. , the Sam's Club chain serves more than 47 million U.S. members...

    , operates in the U.S. and other countries
  • BJ's Wholesale Club
    BJ's Wholesale Club
    BJ's Wholesale Club, Inc. , commonly referred to simply as BJ's, is a membership-only warehouse club chain operating on the United States East Coast, as well as in the state of Ohio...

    , operates in the U.S. only
  • Makro
    Makro
    Makro is a Dutch chain of Warehouse clubs, also called cash and carries. The first one opened in 1968 in Amsterdam. In the following years more stores opened in the Netherlands and in several other countries within Europe. In the 1970s and 1980s Makro extended its business to the Americas and...

    , operates in Europe, previously operated in the U.S.
  • PriceSmart
    PriceSmart
    PriceSmart Inc. is the largest operator of membership warehouse clubs in Central America and the Caribbean, with over 770,000 membership accounts and 1 million cardholders. PriceSmart is headquartered in San Diego, California, and it owns and operates 28 warehouse clubs in 11 countries and one...

    , operates in Central America and Caribbean

Defunct

  • The Wholesale Club, merged with Sam's Club
    Sam's Club
    Sam's Club is a chain of membership-only retail warehouse clubs owned and operated by Wal-Mart Stores, Inc., founded in 1983 and named after Wal-Mart founder Sam Walton. , the Sam's Club chain serves more than 47 million U.S. members...

  • Super Saver, merged with Sam's Club
    Sam's Club
    Sam's Club is a chain of membership-only retail warehouse clubs owned and operated by Wal-Mart Stores, Inc., founded in 1983 and named after Wal-Mart founder Sam Walton. , the Sam's Club chain serves more than 47 million U.S. members...

     (Southeast US)
  • Warehouse Club, was a public company
    Public company
    This is not the same as a Government-owned corporation.A public company or publicly traded company is a limited liability company that offers its securities for sale to the general public, typically through a stock exchange, or through market makers operating in over the counter markets...

  • PACE Membership Warehouse, owned by Kmart
    Kmart
    Kmart, sometimes styled as "K-Mart," is a chain of discount department stores. The chain acquired Sears in 2005, forming a new corporation under the name Sears Holdings Corporation. The company was founded in 1962 and is the third largest discount store chain in the world, behind Wal-Mart and...

    , merged with Sam's Club
  • Price Savers Wholesale Club, merged with PACE Warehouse Club, then merged with Sam's Club
    Sam's Club
    Sam's Club is a chain of membership-only retail warehouse clubs owned and operated by Wal-Mart Stores, Inc., founded in 1983 and named after Wal-Mart founder Sam Walton. , the Sam's Club chain serves more than 47 million U.S. members...

  • Club Wholesale, turned into office supplies
    Office supplies
    Office supplies is the generic term that refers to all supplies regularly used in offices by businesses and other organizations, from private citizens to governments, who work with the collection, refinement, and output of information .The term includes small, expendable, daily use items such as...

     stores, then folded
  • Price Club, merged with Costco
    Costco
    Costco Wholesale Corporation is the largest membership warehouse club chain in the United States. it is the third largest retailer in the United States, where it originated, and the ninth largest in the world...

  • American Wholesale Club, (1986–1989)
  • SourceClub, owned by Meijer
    Meijer
    Meijer, Inc. is a regional American hypermarket chain based in Grand Rapids, Michigan. Founded in 1934 as a supermarket chain, Meijer is credited with pioneering the modern supercenter concept in 1962. About half of the company's 196 stores are located in Michigan, with additional locations in...

  • Max-Club, owned by SuperValu (United States)
    Supervalu (United States)
    SuperValu Inc. is a United States grocery retailer and distributor. The corporation, headquartered in Eden Prairie, Minnesota, has been in business for over a century. It is the third-largest food retailing company in the United States , and ranks #51 on the Fortune 100 list.On June 2, 2006,...

  • Buyers Club, a Denver-based independently owned chain
  • GEM & GEX Membership Department Stores (required Membership like a Warehouse Club)
  • HomeClub, a home improvement warehouse, later became HomeBase
    HomeBase
    HomeBase was a home improvement warehouse chain in the Western United States based in Irvine, California.-History:Robert J. McNulty and George Handgis founded the chain as a warehouse club called the HomeClub, opening the first two stores in Norwalk and Fountain Valley, California in 1983...

    and then folded in 2000