Costco members get younger as shoppers under 40 flock to wholesale

• Costco is the latest warehouse club to tout its growing popularity among millennial and Gen Z shoppers.
• The company said half of the new signings were under 40, helping to lower the average age of the club.
• Sam’s Club reported similar trends as younger shoppers look to stretch their budgets.

One of the hottest clubs for millennials and Gen Z continues to be the wholesale club.

Costco is the latest warehouse brand to tout its growing popularity with younger shoppers, expanding a trend that has become increasingly clear in recent months.

CFO Gary Millerchip said about half of Costco’s new sign-ups last year were under 40 — a figure that accounts for the roughly 2.5 million millennial and Gen Z households that pay for memberships.

“This percentage has increased since COVID-19 and the average age of our members has decreased in recent years,” Millerchip said on Costco’s fourth quarter earnings call Thursday.

In a survey last year, about one in six shoppers between the ages of 18 and 35 told GoBankingRates they shop at Costco, especially as they continue to hit “adult” milestones.

“I’ll admit, I felt a little older when I became a Costco member,” said Dominic Wright, a Gen Z financial planner who told reporters he’s a fan of eyeglasses, contact lenses and company recipes.

According to Placer.ai’s head of analytics research, RJ Hottovy, younger generations are starting families and buying homes in the suburbs, which is a big driving force behind this trend.

“This was one of those things that I think didn’t get enough attention,” Hottovy told Business Insider.

The news echoes results from Sam’s Club, the Walmart-owned club store, where Gen Z membership has grown 68 percent over the past two years.

While Sam’s Club clearly has a technology and convenience advantage over Costco, the main attraction of both brands remains low prices at high quality articles.

“That generation thinks it’s great to save money, and we agree with them,” Sam’s Club CEO Chris Nicholas told CNBC in June.

Nicholas’ comment points to another big change: a new social attitude about getting deals.

“If you think back decades ago, there was this stigma around shopping in value-oriented channels,” Jefferies retail analyst Corey Tarlowe told BI. “Over time, it kind of withered.”

Savvy viewers of The Wolf of Wall Street may recall Jordan Belfort’s office speech in which he ridicules the idea of ​​a failed salesman pulling up to a stoplight in a beat-up Ford Pinto with “a car full of groceries.” from Price. Club, which merged with Costco in 1993, around the time the stage was set.

“If you were ever in a TJ Maxx parking lot two decades ago, you probably saw Nissans and Toyotas,” Tarlowe added. “Now you go there and you’ll still see Nissans and Toyotas, but you’ll also see BMWs and Mercedes.”

Indeed, while so-called store brands were once considered a discount to national brands, Costco’s Kirkland Signature and Sam’s Club’s Member’s Mark have gained a loyal following in stores and on social media.

It’s now all the rage to spend a Saturday afternoon roaming the aisles of a warehouse club, munching on free samples and stocking up on essentials — and that’s great news for Costco.