Luis Madariaga
ACC-321
Dr. R. Hurley
THE DISCOUNT AND VARIETY RETAILING INDUSTRY
PART I - INTRODUCTION AND FINANCIAL ANALYSIS
A. Industry & Company Profiles
In this segment of the retail industry, companies offer members, who pay an annual fee, a limited selection of products and services. Facing competition from discounters, such as Target that do not charge a membership fee, firms in this industry are continuously expanding their offerings to include additional products and services such as food, optical departments, insurance, gas stations and new and used car purchase programs, among others. Warehouse clubs eliminate many of the costs associated with traditional distribution channels by purchasing full truckloads of merchandise directly from manufacturers and storing it on the sales floor. This study analyses the two the largest stand-alone companies in this segment that are solely focused on the warehouse club industry segment.
Costco Wholesale Corporation
Costco was founded in 1983, went public in 1985 and in 1993 merged with Price Club, a successful membership warehouse. With over 400 membership warehouse stores serving more than 38 million members, Costco is now the largest wholesale club operator in the US.
BJ's Wholesale Club, Inc.
In 1984, after the success of Price Club and with the increased presence of Wal-Mart's Sam's Club, the owner of retail chains TJ Maxx, Hit or Miss and HomeClub, Zayre Corporation launched BJ's. With a total of 140 warehouses in 16 states, BJ's is the third largest warehouse club retailer in the US behind Costco and Sam's Club.
B. Financial Statements
Costco's fiscal year ends on the Sunday ...