Chip Taylor

Is Costco the Anti-Walmart or the Anti-Sam's Club?

I realize that you can't really discuss Sam's Club without discussing Wal-Mart, but how useful are comparisons like this?

A typical Costco store stocks 4,000 types of items, including perhaps just four toothpaste brands, while a Wal-Mart typically stocks more than 100,000 types of items and may carry 60 sizes and brands of toothpastes. Narrowing the number of options increases the sales volume of each, allowing Costco to squeeze deeper and deeper bulk discounts from suppliers.

So, how many items and brands are carried at a Sam's Club. Isn't that the relevant comparison?

Have you ever read articles that criticized Wal-Mart/Sam's Club for its aggressive browbeating of suppliers to lower their prices? Well, sainted Costco does it, too.

As most suppliers well know, his gruff charm is not what lets him sell goods at rock-bottom prices - it's his fearsome toughness, which he rarely shows in public. He often warns suppliers not to offer other retailers lower prices than Costco gets.

When a frozen-food supplier mistakenly sent Costco an invoice meant for Wal-Mart, he discovered that Wal-Mart was getting a better price. "We have not brought that supplier back," Mr. Sinegal said.