Discount warehouse retailers: Costco vs. Sam's Club

Tuesday, March 28, 2006 by Mike Adams, the Health Ranger Editor of NaturalNews.com (See all articles...) Tags: sam's club, Costco, customer service

This is a review of members-only discount warehouse retailers. In particular, I'm going to compare Sam's Club with Costco, because I've been a member of both. I've been checking them both out, so I can bring you this unbiased, unsolicited review. So, what's the bottom line on these two discount retailers? Let me tell you first what I'm looking for in retailers. A lot of people only care about the price, but I'm not really that interested in the price of products, as both warehouses are very competitive on price. I'm more interested in two things: Selection and process efficiency.

I want to get in and out of a store as quickly as possible, with the least amount of time and frustration waiting in line. I want to have the selection so that I can find things I need, like high-end computer systems, storage devices, bulk salads, organic produce and so on. That's what's important to me. I find the selection at Costco and Sam's Club to be very similar. I don't find an obvious advantage one way or another. But when it comes to process efficiency, I find a huge difference between Sam's Club and Costco wholesale.

Sam's Club is not a shining example of good customer service

First, here's the bad news, and it has to do with Sam's Club. I don't know if this is true in every other city, because I can only speak about what I find to be true in Tucson, Ariz., but here in Tucson, Sam's Club seems to go out of its way to hire high school dropouts. The cashiers seem to be clueless, and the staff is slow, unmotivated and not really interested in helping the customer.

Recently, I waited in line for such a long period of time that I finally just gave up in disgust, left the cart there in the line and walked out of the store. As a busy professional, I don't have time to wait in line at Sam's Club while a bunch of uneducated cashiers try to figure out how to ring things up. It shouldn't be that difficult. Everything has a UPC symbol; all you have to do is point the laser at it. It's not like they actually have to do math (which, of course, would be asking way too much).

Then, at Sam's Club it's not enough to merely wait in line one time. They want to make sure you wait in line a second time at the exit. This is the place where they claim they are helping you, the customer, to make sure you didn't overpay for something. They make you wait in line again, and it could be another five to six minute wait just to get out the door after you've already paid for everything. As I have discussed in previous articles, this whole system of making sure you haven't overpaid for anything is complete hogwash. It is really a system of inventory control for them to make sure that you're not stealing things. In any case, they make you wait, and at Sam's Club, in my experience, it's almost always a long line. They're understaffed, and the staff that is there isn't very bright. I would never hire any of these people.

Great service at Costco

In contrast, when I'm at Costco and I see some of the people working there, especially the managers, I think to myself, "I'd like to hire these people. These people are really sharp and quick, with a good attitude." They actually want to help you as a customer. They are really into problem solving, and the cashiers are fast and courteous.

These people are at least twice the speed of the cashiers I've observed at Sam's Club. They get things done. In fact, they send a person to your cart even before you get up to the cashier, and he starts zapping items in your cart, making sure you're ready to go, so that by the time you get up to the cashier, the checkout process is easy and streamlined.

That's thinking ahead, and that's what they do at Costco. In fact, I went into Costco, slapped down my ID and my business card, filled out an application form, and they had me signed up with an American Express executive membership card in less than six minutes. I was shopping just a few minutes later, and I was out of that store in less than 12 minutes. That's what I call a shopping experience. The faster I can buy my stuff and exit the store, the better.

Warehouse stores are home to "garbage foods" because that's what sells

Having said all that, there is something I do not like about both of these places. They both sell a lot of really unhealthy garbage food items. They're really into brand-name foods that have toxic ingredients like hydrogenated oils, refined sugars, artificial food coloring and sodium nitrite, which promotes cancer. There are a lot of dangerous ingredients in those foods, and this seems to be par for the course at these wholesale clubs.

But you know what? That's what people buy, and you can't really blame these retailers for carrying what people are going to buy. When consumers shift their demand toward healthier items, then the wholesale clubs will start carrying those healthier items.

We're already seeing that with the shift toward whole-grain foods, rather than refined-grain foods, for example. People are buying whole grain breads now more than white bread. That's a good, healthy shift, and these discount retailers are going to follow suit. I don't expect Costco to be a health food store, so it's not a big negative to me that they currently carry many unhealthy items.

The bottom-line verdict here is that Sam's Club gets a definite thumbs down for wasting your time and hiring employees who seem totally clueless about how to make things go faster, whereas Costco gets an enthusiastic thumbs up for having intelligent employees and a highly efficient checkout process that gets you in and out of the store in no time. From now on, you can guess where I'll be going when I need to buy something from a members-only discount warehouse retailer.

Now, I can't guarantee that you won't experience entirely different results somewhere else. Perhaps the management of these warehouse retailers is a regional thing, and Sam's Club might be a great place to shop in Boston or Seattle. But it sure isn't in Arizona. No price, no matter how low, is worth wasting time experiencing a torturously incompetent checkout process. Sam's Club CEOs take note: Your broken process is easy to fix. Just go shop at Costco and observe what they do.

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