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Warehouse club
A warehouse club (or wholesale club) is a retail store, usually selling a wide variety of merchandise, in which customers may purchase large, wholesale quantities of products, which makes these clubs attractive to both ordinary consumers and small business owners. The clubs are able to keep prices low due to the no-frills format of the stores. They are distinguished from traditional cash-and-carry wholesale businesses in that their warehouses are substantially larger in size, and they do not cater purely to businesses but also allow some or all types of consumers to obtain memberships. They are also distinguished from warehouse stores in that they usually charge annual membership fees, and require presentation of proof of membership to both enter the warehouse and complete a purchase.
Membership in a warehouse club superficially resembles that in a consumers' cooperative, but lacks key elements including cooperative ownership and democratic member control. The use of members' prices without cooperative ownership is also sometimes used in bars and casinos.
In 1976, Sol Price (who in 1954 founded FedMart, an early US discount store) and his son Robert Price founded Price Club in San Diego, as their first warehouse club. In a 1988 article, The New York Times Magazine credited Price Club as the "pioneer" of the warehouse club retail format. After his departure from FedMart, Sol Price noticed that small businesses in San Diego either ordered directly from four or five large wholesalers or they bought locally from relatively small cash-and-carry wholesalers. Therefore, Price Club was originally positioned as a much larger, volume-oriented version of the cash-and-carry wholesale format, meaning that prospective members were required to present resale certificates or professional licenses. Based on a customer's suggestion, Price Club subsequently allowed government employees to apply for memberships. This privilege was later extended to employees of utility companies and hospitals, followed by members of certain credit unions and savings deposit clubs.
In 1982, the discount pioneer John Geisse founded The Wholesale Club of Indianapolis, which he sold to Sam's Club (a division of Walmart) in 1991.
In 1983, James (Jim) Sinegal and Jeffrey H. Brotman opened the first Costco warehouse in Seattle. Sinegal had started in wholesale distribution by working for Sol Price at FedMart.
In 1983, Kmart's Pace Membership Warehouse (later sold to Sam's Club) started operations. That same year, Sam Walton opened the first Sam's Club on April 7, in Midwest City, Oklahoma.
In 1984, former The Wholesale Club executives founded BJ's Wholesale Club, owned by Zayre.
As of 1988, Price Club was the leader of the warehouse club industry, with over 40 warehouses operating across the United States and Canada. Stephen F. Mandel, Jr., then a Goldman Sachs analyst, called the warehouse club "the greatest revolution in retailing in the last 10 years."
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Warehouse club
A warehouse club (or wholesale club) is a retail store, usually selling a wide variety of merchandise, in which customers may purchase large, wholesale quantities of products, which makes these clubs attractive to both ordinary consumers and small business owners. The clubs are able to keep prices low due to the no-frills format of the stores. They are distinguished from traditional cash-and-carry wholesale businesses in that their warehouses are substantially larger in size, and they do not cater purely to businesses but also allow some or all types of consumers to obtain memberships. They are also distinguished from warehouse stores in that they usually charge annual membership fees, and require presentation of proof of membership to both enter the warehouse and complete a purchase.
Membership in a warehouse club superficially resembles that in a consumers' cooperative, but lacks key elements including cooperative ownership and democratic member control. The use of members' prices without cooperative ownership is also sometimes used in bars and casinos.
In 1976, Sol Price (who in 1954 founded FedMart, an early US discount store) and his son Robert Price founded Price Club in San Diego, as their first warehouse club. In a 1988 article, The New York Times Magazine credited Price Club as the "pioneer" of the warehouse club retail format. After his departure from FedMart, Sol Price noticed that small businesses in San Diego either ordered directly from four or five large wholesalers or they bought locally from relatively small cash-and-carry wholesalers. Therefore, Price Club was originally positioned as a much larger, volume-oriented version of the cash-and-carry wholesale format, meaning that prospective members were required to present resale certificates or professional licenses. Based on a customer's suggestion, Price Club subsequently allowed government employees to apply for memberships. This privilege was later extended to employees of utility companies and hospitals, followed by members of certain credit unions and savings deposit clubs.
In 1982, the discount pioneer John Geisse founded The Wholesale Club of Indianapolis, which he sold to Sam's Club (a division of Walmart) in 1991.
In 1983, James (Jim) Sinegal and Jeffrey H. Brotman opened the first Costco warehouse in Seattle. Sinegal had started in wholesale distribution by working for Sol Price at FedMart.
In 1983, Kmart's Pace Membership Warehouse (later sold to Sam's Club) started operations. That same year, Sam Walton opened the first Sam's Club on April 7, in Midwest City, Oklahoma.
In 1984, former The Wholesale Club executives founded BJ's Wholesale Club, owned by Zayre.
As of 1988, Price Club was the leader of the warehouse club industry, with over 40 warehouses operating across the United States and Canada. Stephen F. Mandel, Jr., then a Goldman Sachs analyst, called the warehouse club "the greatest revolution in retailing in the last 10 years."