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It is not a secret that one of the most competitive angles in the retail industry is the grocery space.
This is partly because these stores have thin razors, so every dollar has a difference.
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In order to maintain competition and attract most customers, groceries must store a lot of inventory to satisfy a wide audience. But this also means taking a large volume of responsibility – often with a low shelf life.
Wal -Mart, for example, re -stores his shelves every two days on average.
In addition, many customers are very sensitive to prices; They will notice when the grocery store changes its prices and is frustrated.
Since a few customers are from brands, they will go to other stores in search of low prices.
This means that in order to keep customers or attract them, most grocery stores must reduce their prices to stay relevant. This makes the margins thinner.
On average, the model grocery store has any place of profit margins between one to three percent. So there is a lot of possible negative side and a very small space for error.
Golden grocers help lead the market
This competition can be great for customers, even if they feel frustrated due to the high cost of groceries.
Some of the largest players work in space, which includes Costco and Sam’s Club, using a slightly different model.
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Grocery stores in Warehouse are receiving repeated organic fees, giving them access to superior savings kept in brick spaces and mortar shells.
This is because Sam’s Club and Costco buy their orders with large quantities of suppliers, allowing them to drop in prices. In turn, they are able to impose fees on their customers less than the prices for stock, because customers also buy their goods in large quantities.
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Retail experiences also provide their customers with other opportunities in things such as gas and airlines.
No wonder that the Sam Club includes about 69 million members and that Costo has more than 130 million.
Sam adds more warehouse clubs
While the Sam club is smaller than Costco in terms of locations and membership, it is gaining at a ground speed.
Sam club has always been on the road to expansion, but it is preparing to expand more quickly, and declares that it intends to open 15 new stores annually.
This is a rise in his ambitions only two years ago, when it announced that it would open 30 new stores within five years.
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The Sam Club has achieved special success as customers search for a better value for their basic commodities, such as eggs, milk, paper products and other basics of consumer.
“In many times, we do a good job. But in difficult times, we are doing well,” said CEO Chris Nicholas.
Sam’s Club also plans to renew its fleet of about 600 stores.
“We are expanding our arrival through and reshaping new clubs, taking into account the participation and speed omni. We will open 30 new clubs that we previously participated, and I am excited to share our plans to build a pipeline to 15 new clubs every year for the expected future.”
Sam club members also grow quickly. It saw 13 % growth in the fourth quarter.
