Costco and Walmart shouldn't be directly compared, because they target very different market segments - so different, in fact, that the segments may as well be totally unrelated.

If I wanted to buy a product, I would expect to find, say 2 to 3 varieties/brands of the product in Costco. Every one of these would be MORE expensive that the cheapest variety of the same product in Walmart, although the exact same brand would be cheaper (per unit price) in Costco. Also, bulk packaging at Costco would cause my purchase to be more expensive than if I bought the same product (in a smaller package) at Walmart. Thus, for the same product, Walmart would likely have a larger markup on a per-unit basis, but this benefit is eroded by the fact that more employee-transactions (cashier checkouts, packaging, shopping carts collected from parking etc) are needed to sell the same VOLUME of the product (or for the same revenue).

For this reason, a comparison with Sam's Club might indeed be more appropriate, but here the difference in target markets becomes important. The key difference between Sam's Club and Costco (in my opinion) is that Sam's Club carries mostly the same stuff as Walmart, only in bigger packaging. However, Costco carries a restricted range of products, although all the products carried are of very high quality. This differentiates the target market - Costco mostly has shoppers who want good quality products (and hence more expensive) but at reasonable per-unit prices. Meanwhile Sam's Club members mostly want similar products as carried in Walmart, only in bulk packaging, and even cheaper than at Walmart.

You're not wrong, but it begs the question:

Why doesn't Wal-Mart make distinctions between Sam's Club and its parent company? The target market for each is inconsequential, considering that Wal-Mart refuses to allow an apples-to-apples comparison.

Whic is, of course, in keeping with Wal-Mart's track record of hiding the higher macroeconomic costs of its lower prices.

The author agreed that Sam's Club is the better comparison. But, since Walmart doesn't provide separate numbers, she was hamstrung in her efforts to do a more direct comparison.

However, it's rather strange that she didn't compare them head-to-head when such comparisons WERE possible. For example, she compares Costco's website to Walmart's. But Sam's Club has its own website and its incredibly busy home page has tons of expensive items from computers and digital SLRs, to swimming pools, all the way to the very same outdoor play "forts" Costco sells.

I agree, Sundown and Trepid. I was wondering that the whole article. (Kev, that isn't what "begs the question" means. It means using an unproven assertion to help a proof of something else)

Sams clubs were originally started for the small businesses, restaurants, rural convenience stores, small contractors, etc. they tehn added the *by invitiation only * model, whereby you had to be affiliated with some grou inorder to get a member card and be rewarded with the lower rices. as the need arose and the idea of allowing nearly everyone to join, sams had to adjust their model. no one has to buy there but those who do must find it in their best interest to do so.

smashignitionst:

I agree, Sundown and Trepid. I was wondering that the whole article. (Kev, that isn't what "begs the question" means. It means using an unproven assertion to help a proof of something else)

I wasn't aware that the direct apples-to-apples was accesible in some format, so to my perspective, "begs the question," was completely appropriate.

Talk about semantics, yeesh.