A warehouse club (or wholesale club) is a retail store, usually selling a wide variety of merchandise, in which customers may buy large, wholesale quantities of the store's products, which makes these clubs attractive to both bargain hunters and small business owners. The clubs are able to keep prices low due to the no-frills format of the stores. In addition, customers may be required to pay annual membership fees in order to shop.
Membership in a warehouse club superficially resembles that in a consumers' cooperative, but lacks key elements including cooperative ownership and democratic member control. The use of members' prices without cooperative ownership is also sometimes used in bars and casinos.
In 1983, James (Jim) Sinegal and Jeffrey H. Brotman opened the first Costco warehouse in Seattle. Sinegal had started in wholesale distribution by working for Sol Price at FedMart. Also in 1993, Costco and Price Club agreed to merge operations, after Price declined an offer from Sam Walton and Walmart to merge Price Club with Sam's Club. Costco's business model and size were similar to those of Price Club, which made the merger more natural for both companies. The combined company took the name PriceCostco, and memberships became universal, meaning that a Price Club member could use their membership to shop at Costco and vice versa. PriceCostco boasted 206 locations generating $16 billion in annual sales. PriceCostco was initially led by executives from both companies, but in 1994, the Price brothers left the company to form Price Enterprises, a warehouse club chain in Central America and the Caribbean unrelated to the current Costco.
As of 2009[update], the three largest warehouse club chains operating in the United States are BJs, Costco, and Sam's Club. BJ's Wholesale Club is one of the smaller competitors, with stores located primarily in the Eastern United States. Costco and Sam's Club are the largest chains. Costco has locations in seven other nations including Australia, Canada, Japan, Korea, Mexico, Taiwan, and the United Kingdom. Sam's Club, a division of Walmart, claims a membership base of 47 million persons and 602 stores across the United States (as of June 2019).
On July 16, 2020, it has been announced that Price Club will be returning to San Diego with new locations.