There has been new news from Costco's North store, which has been rumored to have opened for many years.
Recently, a citizen inquired about the latest progress of Costco's opening customer project in the district mailbox of Qingdao Chengyang Government Affairs Network. The Chengyang District Investment Promotion Center replied that on September 3rd, after communicating with the project party, it was learned that the project party intends to open its first northern store in Beijing this year. After opening the Beijing store, it plans to open its second northern store in Qingdao in 2025.
However, large projects including cultural tourism and commercial retail will have a considerable amount of communication and negotiation before landing, and there have been various ways of spreading information about Costco's location for opening customers. But the specific opening time and location still need to wait for the final decision.
Qingdao Chengyang Government Affairs Network
Costco, a warehouse member supermarket, opened its first store in Chinese Mainland in August 2019. As of now, Costco has opened 7 stores in Shanghai, Suzhou, Ningbo, Hangzhou, Shenzhen, and Nanjing. Regarding the progress of opening a store, Zhang Sihan, the president of Costco's Asia region, once said, "We are a conservative brand. Generally, we open a store in a city first to see the situation, and then consider expanding our store
For membership based warehousing supermarkets, the factors considered in site selection are closely related to the local economic development level, consumption power, and other factors.
In the first quarter financial report teleconference of the company in fiscal year 2024, when an analyst asked why the opening of stores in Chinese Mainland was relatively slow, Costco's market opener responded that there were also talent considerations, "how to transfer employees from existing stores to new stores, which also takes some time."
But this does not mean that Costco's opening customers have no ambition for the Chinese market. Zhang Sihan also mentioned in his public speech that Costco market opening customers still need to open more stores in Chinese Mainland, strengthen local supply chain capacity, continue to reduce transportation and inventory costs to achieve balance of payments.
Compared with the declining traditional hypermarkets, warehouse membership supermarkets have clearly become a trend in the industry in recent years. The advantage of its business model lies in its bias towards the middle-class consumer group, higher standards in product selection, continuous incubation of "hot products" on its own brand, and increased consumer loyalty through membership services. These types of supermarkets usually sell in large packaging, which has a certain cost-effectiveness advantage. This is also inseparable from long-term stable cooperation with suppliers in the supply chain.
According to the report "Development Status of China's Warehouse Member Supermarket Industry in 2023-2024" by iMedia Consulting, the market size of China's warehouse member supermarket industry continued to grow from 2012 to 2022, reaching 33.5 billion yuan in 2022, a year-on-year increase of 10.1%, and is expected to reach 38.78 billion yuan in 2024.
At present, Sam's Club, the "leader" in member stores, is making great strides in the Chinese market.
According to retail business finance news, Dongguan Sam's Club will open in October this year, which is also its 50th store nationwide. The store took only one and a half years from construction to opening.
In recent years, Sam's Club has accelerated its expansion in China, entering around 25 cities. According to Sam's previous plan, there will be 6-7 new stores opening in China every year in the future.
Compared to traditional offline retail formats that have mostly encountered large-scale store closure crises, Sam's Club in China can be considered as "expanding against the trend" at present.
What supports Sam's store opening is strong performance. According to Wal Mart's financial report for the second quarter of fiscal year 2025 released in August, its total revenue reached $169.335 billion, up 4.8% year on year.
The performance of the Chinese market is impressive, with net sales of 4.6 billion US dollars, a year-on-year increase of 17.7%, maintaining a high growth momentum for two consecutive years. Among them, the net sales growth rate of e-commerce business reached 23%, and the e-commerce penetration rate reached 49%.
Sam is driving the growth. Renee, CFO of Wal Mart, pointed out at the second quarter performance meeting that the growth trend of members has driven the double-digit growth of sales in China, of which about 50% are from online channels. In addition, the number of "one hour express delivery" orders increased by 28% during the quarter, reaching 59 million orders.
Renee, CFO of Wal Mart, said publicly earlier, "In terms of total revenue, some of our best performing stores are in China, or Sam's Club in China."
At present, in addition to Sam and Costco, the market opener, there are also many other competitors in the Chinese market, such as the Hema X Club, which has repeatedly engaged in high-profile "business wars" with Sam, and Metro AG, which has a very early layout in membership.
Although the market still has potential, competition among membership based warehousing supermarkets remains fierce, with the core being that all parties continue to compete and catch up in store opening strategies, product categories, membership systems, and supply chains. In the current quietly changing consumer environment in China, companies still need to maintain insight into consumers and sensitivity to market trends.