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Club Stores in P.R. See Healthy Growth in Visits

By on August 5, 2017

Editor’s note: The following article originally appeared in the August 3 print edition of Caribbean Business.

This week’s Gaither International survey has found that Puerto Rico residents are continuing to visit club stores, as the visit incidence for these retail establishments has risen by 5 percentage points since 2013.

About 27% of respondents interviewed so far in 2017 say they have visited a Club Store within the past 30 days, which translates to a projected number of some 851,943 monthly visitors, Gaither said.

This category of store has gradually been seeing significant growth in incidence of visits throughout the years. Since 2013, the visit incidence for club stores has jumped from 22% to 27%.

“When looking at the incidence of visiting these stores among demographics, we notice the visit incidence is overrepresented in the High and Middle lifestyle tiers. It is also represented in the 35-to-54 age segment and in the Caguas region. At the same time, the incidence is overrepresented among those who report being married,” said Melanie Dederick, a client service associate at Gaither International.

Puerto Rico has two large club store chains operating on the island, Sam’s Club and Costco. When asked which club store respondents have visited, the leader is currently Sam’s Club with an 86% visit incidence, followed by Costco with an incidence of 24%.

However, there is duplicity in visits among the two of them: among those who visited a Sam’s Club in the past 30 days, 12% said they also visited a Costco, and among those who visited a Costco, 41% mentioned having visited a Sam’s Club.

“This leaves the question of what consumers are looking for in one store that they didn’t necessarily find at the other; we must also take into consideration other factors such as location,” Dederick said.

“One factor that may be driving customers from one store to another may be the variety offered in each; perhaps one store offers an ingredient that the other does not or they saw better specials in the other. But the main driver in visits must be the location, with only four stores in Puerto Rico focused in the north [part] of the island, it’s no surprise the duplicity for Costco is high. For some, it may be a longer drive to visit a Costco when they can reach a Sam’s Club more quickly,” she added.

Keep in mind that Sam’s Club has had a presence in Puerto Rico for a longer time than Costco, and that Costco only has four stores on the island while Sam’s Club currently has nine, as a store in Carolina recently closed, she indicated. “Costco’s share is considerably healthy.”

Looking at the share of visits among both stores so far in 2017, Gaither said Sam’s Club has dropped by 3 percentage points since the first quarter and Costco has gained 4 percentage points during the same period.

“When taking a look at the frequency of visits, we notice it is about the same for both club stores. In general, most who visited a club store in the past 30 days went only once (74%), 19% went two times, 5% went three times and 3% said they went four times or more,” Dederick said.

The basic membership for Costco has risen from $55 a year to $60 a year, while at Sam’s Club the cost is $45 a year. This could have an impact on future business for Costco.

“Costco has more visitors that pertain to the High lifestyle tier than Sam’s Club and Costco has become invaluable for many local businesses like food trucks and local restaurants. This rise in membership cost for Costco may cause some of those people who visit both to choose only one membership,” Dederick said.

The results are from Gaither International’s Media Brand Profiles survey, which interviews about 500 people weekly from among a representative sample of the island’s population ages 12 and older.

—Polling is conducted by Gaither International and results are reported exclusively by Caribbean Business.

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