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Competitive impact of warehouse clubs on retail entities

Gilbert, Ronald Wilson, II

Scope and Method of Study: This study examines the factors that influence competition between wholesale clubs and other retail entities. The factors examined are purchase planning, specific customer demographics, buying patterns, and customer preferences. First, current literature is researched to see what analysts presently believe about the topic. Second, exit surveys are prepared and conducted as customers leave the warehouse club.

Findings and Conclusions: Some of the factors examined tend to influence who is the competitor. For example, females identified supermarkets and department stores as prime competitor groups, while males chose convenience stores and distributors. Also customer preferences towards the warehouse club are, not surprisingly, centered around price. The aspects of the warehouse club most disliked by the customer show areas the warehouse club industry can make improvements to reduce the influence of competitors on their customers.