To quote from IBISWorld, this industry is “made up of large stores that primarily retail a general line of grocery products combined with merchandise items. Warehouse clubs offer customers a wide selection of goods (often in bulk) at discounted prices in exchange for a membership fee that is paid by each customer”. Warehouse clubs offer products like groceries, health and wellness products, apparel, and electronics. Some outlets also include gasoline stations. Supercenters are large discount department stores that also sell perishable groceries. Unlike warehouse clubs, supercenters do not have eligibility requirements for customers.
Costco, Wal-Mart, Target, Sam’s Club, and BJ’s Wholesale as some of its most significant competition in the general merchandise category. Big box retailers like Home Depot, Lowe’s, Best Buy, as well as food and drug retailers like Walgreens Boots Alliance and CVS Health also present competition in select categories.
According to the Porter’s five forces model, the industry of warehouse clubs and supercenters has strong competitive forces on rivalry among existing players and threats of substitute products of services. To the contrary, this industry has weak forces on threats of new entrants, bargaining power of suppliers and bargaining power of buyers.
Based on this research, I found that the most interesting part to me is the warehouse clubs and supercenters industry has been one of the fastest-growing industries in the retail sector. During the next five years, the industry will continue growing.
Porter’s five-forces model
1. Rivalry Among Established companies—a strong competitive force
Due to th...
... middle of paper ...
...hat 452910 is the code for warehouse clubs and supercenters. Provided by The United States Census Bureau, this industry comprises establishments known as warehouse clubs, superstores or supercenters primarily engaged in retailing a general line of groceries in combination with general lines of new merchandise, such as apparel, furniture, and appliances. Using Merchant Online to collect data of 60 firms in this industry in the year 2014 and 2015 that I can analyze the performance, which is reflected by return on equity (ROE).
I employed T-test as my statistical methodology. From the T-test outcome table below, we know that the mean in 2015(=0.3025) is lower than the mean in 2014(=10.6159). Since the p-value (=0.0630) is greater than 0.05, I can’t reject the null hypothesis. The statistical analysis doesn’t show strong evidence that year 2014 is higher than year 2015.
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