Costco is currently the world’s second-largest retailer in the world, only behind Walmart. And with over 572 stores in the United States alone, the company welcomes many customers into its doors on a regular basis.
With that said, that doesn’t mean Costco isn’t operating without any competition.
Costco has a lot of competitors. And while the companies similar to Costco may not have near the same revenue as Costco, they aren’t too far behind.
In this article, we’re taking a look at 18 of Costco’s biggest competitors, the kinds of products they sell, and other key facts you need to know about them.
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1) Sam’s Club
We’re kicking our list off with Sam’s Club. This is because they are the closest in quality, design, and business model to Costco. For most people, Sam’s Club is actually Costco’s biggest competitor due to the similarities between the two stores.
To start, both Sam’s Club and Costco only allow members to purchase their products. The stores offer large discounts on bulk items, but if you want to avail of these prices, you need to sign up for a membership.
On top of that, the stores stock up on very similar products. These include electronics, groceries, clothes, wellness products, and just about everything you would need from a large retailer.
Sam’s Club even has more locations than Costco, as they have 600 stores in the US alone. This doesn’t include their other stores in countries like China and Mexico, which play a big role in the store’s $163 billion revenue that they reported in 2020.
2) Walmart
The second biggest Costco competitor is Walmart. To start, they are the owners of Sam’s Club, and since Sam’s Club is Costco’s biggest competitor, Walmart is very close behind.
On top of that, Walmart is the only hurdle preventing Costco from being the largest retailer in the world. And while their stores are very different, there are some similarities between the average Walmart vs Costco stores.
To start, both stores are known for their cheap product, although Costco items are seen in a better light than Walmart products. This is because while most Walmart products are cheap, there are many people who say the quality isn’t on par with Costco.
Walmart currently has way more locations than Costco. In the US alone, Walmart operates in over 4,700 different locations. This doesn’t even take into account their branches in other countries, which can bring the total number of Walmart locations up to over 11,000.
3) BJ’s Wholesale
While they only have around 200 locations in the US, BJs Wholesale offers a similar shopping experience to Costco. Just like Costco, BJs Wholesale is a members-only club that sells products in bulk at discounted prices.
So, if you don’t have a Costco in your area, check if there’s a BJs Wholesale, as you can find a similar shopping experience in these stores.
That means you can buy a wide variety of products in their stores just like at Costco. At an average BJs Wholesale location, you can find groceries, electronics, toys, games, and tons of different products.
BJs Wholesale reported around $13.19 billion in revenue in 2020. Now, this isn’t as large as Costco, Walmart, Target, and other big players, but it’s still a pretty decent share of the market, which makes the company a top Costo competitor.
4) The Schwarz Group
The Schwarz Group may not be as familiar as some of the other names on this list, but that’s because they operate different grocery stores. The most popular examples would probably have to be Lidl and Kaufland.
While it may not be a major competitor in the US, the Schwarz Group poses significant competition for Costco on the international scene. The Schwarz Group operates over 12,900 stores in 33 countries, which is a very large presence.
Stores owned and operated by the Schwarz Group typically supply customers with food products and a bunch of other household essentials at competitive prices.
Remember, Costco also operates in other countries like Mexico and Canada. And in these international markets, Costco views the Schwarz Group as a major competitor.
5) Amazon
Amazon may not look like a Costco competitor on the surface level, primarily because Amazon occupies the digital market. However, Costco has recently tried to push itself into the e-commerce market, and the biggest obstacle is Amazon.
The launch of the Costco website was a clear sign that the company was trying to carve a place for itself in e-commerce. And currently, there is no doubt that Amazon is the current leader of this market since they are the go-to platform for anyone looking to shop online.
With that in mind, Costco doesn’t stock up on any Amazon products and even Amazon gift cards as that can be seen as aiding the competition. So, you won’t be able to find Amazon Kindles or Firesticks when shopping at Costco, whether in-store or through the website.
6) Aldi
Costco has a number of signature exclusive brands such as Kirkland. And according to many customer reviews, these brands can compete with most name and national brands on the market today.
Since Aldi’s stores consist mostly of their own original brands designed to compete with national brands, they are also a major Costco competitor.
Currently, Aldi has over 10,000 stores worldwide, which is significantly more than Costco. Because of this, Aldi may reach a wider audience and customer base than Costco.
While the company originally began in Germany, they have since branched out to the US and a bunch of other countries. Because of this, Aldi is actually one of the largest grocery chains in the world.
7) Tesco
Tesco originally started out in the UK. However, they have now branched out into over 11 different countries, with over 4,600 different stores worldwide.
Because of this wide reach, Tesco is considered a major Costco competitor. While the company may not be as big as Costco yet, they reported around 59 billion British pounds in revenue in 2020, which isn’t as much as Costco, but definitely comparable.
Tesco is a complete grocery store. So, if you go inside their walls, you will find all the products you would need from a regular grocery trip. This includes food, household goods, and even clothing.
Another reason Tesco is one of the top grocery stores in the world right now is that it stocks up on high-quality products and has a great customer service system to satisfy the needs of any customer.
8) Carrefour
Carrefour is another direct Costco competitor. But since they are based out of France, not too many people are familiar with the store. With that said, Carrefour actually operates over 12,000 stores in 30 different countries.
This is a very significant reach which means that Costco competes with them on a regular basis, especially in areas with both a Costco and Carrefour location.
One of the reasons for Carrefour’s great reach is the fact that they don’t just manage grocery stores. Carrefour also operates convenience stores and hypermarkets, which easily makes them one of the leading grocery stores in Europe.
9) Kroger
With over 2,800 stores in the US and $70 billion in revenue in 2020 alone, Kroger is a Costco competitor. Kroger is regularly mentioned in debates of the biggest grocery stores in the US, so it should come as no surprise that they are actually a direct Costco competitor.
Just like Costco, customers can find a wide range of products at a Kroger store that includes clothing, electronics, games, toys, food, shoes, and healthcare products.
Another advantage of Kroger that allows it to compete with Costco on a regular basis is its pharmacy. Having an in-store pharmacy makes for a very convenient shopping experience, which is why many people in the US do their regular grocery shopping at Kroger.
10) Target
Target is a general merchandise retailer. Since they stock up on a wide variety of goods, they are regular in conversations regarding Costco, as they are seen as a top competitor in the US retail market.
The main characteristic of Target stores is the quality of their products. At most Costco locations, you can find a wide range of top-quality items that you may not find at other grocery stores. So, while the company targets a different audience, they still attract large numbers of customers on a regular basis.
As a major retailer in the US, Target reports a large annual revenue. In 2020, the store reported a total of $93 billion in revenue from their 1,800 US stores alone. This doesn’t even include the revenue from their Chinese, Indian, and European stores and locations.
Another reason Target is a major competitor of Costco is because of Target’s price matching policy with Costco.
11) Auchan Retail
Auchan Retail isn’t as big as Costco and that’s a fact. But since the store easily stands out because of its high-quality produce sections, they still compete with Costco in locations where both stores operate.
Originally based in France, Auchan Retail now operates in 13 different countries and reported revenue of 31.6 billion Euros in 2020 alone.
12) Lowe’s
Costco stocks up many different products, which is why they can sometimes compete with stores that aren’t in the same general category as them. An example of this is Lowe’s, a great place where people can find a variety of home improvement products that they can use for their projects.
So, since Costco also sells different home improvement items in their stores, they directly compete with Lowe’s in that specific market. Lowe’s has over 2,200 different stores in Canada, the US, and Mexico, which is the main reason for the $72 billion in revenue that they reported in 2020.
13) Home Depot
Just like Lower’s, Home Depot competes with Costco in the home improvement market. And while there are a fair amount of people who go to their local Costco to buy home improvement tools and equipment, many prefer going to Home Depot due to the wider collection of items you might find.
In fact, Home Depot is the largest home improvement store in the US today. So, that means that it actually beats out Costco in this area.
Since Costco sells products aside from the home improvement gear, this isn’t a big issue. However, in terms of competition, Home Depot is a major competitor despite operating in a slightly different market.
14) Best Buy
Best Buy is the leading electronics and appliance store in the US. With over a thousand Best Buy stores in operation, it’s no surprise that they attract lots of customers and report a lot of revenue.
Just like Costco, Best Buy stocks up on a variety of electronics and appliances. However, if you visit a Best Buy, you might notice that they actually have a wider electronics category than Costco, which may come as a surprise, since Costco is largely known for its wide range of electronics.
Another advantage that Best Buy has over Costco is that the store always has the newest products. So, people who want to be one of the first owners of the newest gadget on the market will likely flock to Best Buy over Costco.
Another reason customers might prefer Best Buy is because they already price match Costco, so it wouldn’t make a difference to them in regards to price.
15) Dollar General
The biggest similarity between Costco and Dollar General is their prices. Granted, Dollar General doesn’t stock up on as many different products as Costco. However, when it comes to clothes, groceries, shoes, and other household products, you can expect very low and competitive prices at Dollar General.
Dollar General isn’t as big as Costco, but they are close. Currently, there are over 500 Dollar General stores in the US, which is why they were able to report over $27 billion in revenue in 2020.
16) Big Lots
Big Lots is fairly popular and a large grocery store that’s a go-to option for many US shoppers. Their store contains a bunch of different products including food, furniture, home decor, toys, and others. On top of that, the store sells these products at relatively low prices, which is why it’s so popular.
However, many customers complain that the quality of Big Lots’ products isn’t up to par with Costco’s. So, Big Lots is ideal for shoppers on a budget, but if you’re after better quality, you might be better off at Costco, especially since Costco is so cheap already.
With that said, there’s still no doubt that Big Lots is a direct Costco competitor, especially since they operate in the same market.
17) Walgreens
Walgreens doesn’t use the same business model as Costco. However, that doesn’t mean the company can’t compete with Costco. While they don’t have the lowest prices, you can find top-quality products at Walgreens at a very competitive price.
Customers on the hunt for food, pet products, home decor, and electronics can find everything they need at Walgreens. Because of this convenience, Walgreens easily competes with Costco, which is evident in their reported $121 billion in revenue in 2020.
18) CVS
CVS has a pretty limited selection. However, this actually works to their advantage and allows them to regularly compete with Costco in the large retail market.
On top of that, even if the selection is limited, CVS still stocks up on most, if not all of the essentials one might need during a grocery trip.
Currently, the store has over 9,000 locations in 49 states and reported $267.8 billion in revenue in 2020.
Conclusion
Costco is definitely a top player in today’s retail market. In fact, they are the second-largest retailer in the whole world. With that said, there are still more than a few stores and companies that can hold their own against Costco.
While the retail market is very large, Costco rests comfortably above them all – with the exception of Walmart, especially in the US market. However, the revenue numbers change every year, and these 18 stores may just overtake Costco or vice versa in the near future.
