Smart & Final Launches in Mexico, Rivals Costco, Sam's Club

Smart & Final, a well-established supermarket chain in Southern California, has entered the Mexican market, offering consumers the ability to buy in bulk without the need for an annual membership. The chain's expansion is poised to shake up the wholesale shopping sector, which has been dominated by Sam’s Club and Costco.

Unlike its competitors, Smart & Final allows customers to purchase wholesale products without requiring a membership. This model distinguishes it from Sam’s Club and Costco, where customers must pay an annual fee to access bulk discounts. Smart & Final offers food, beverages, household items, and personal care products. 

To compete with established players like Sam’s Club and Costco, Smart & Final is leveraging its no-membership model to attract a broader customer base. The chain plans to offer competitive pricing and regular promotions to challenge customer loyalty to existing wholesale clubs. 

Sam’s Club and Costco have succeeded in Mexico largely due to their focus on value, product exclusivity, and a strong membership model. Research indicates that 65% of Mexican consumers choose Sam’s Club and Costco for their competitive prices compared to traditional stores. Additionally, the quality of products, particularly private labels like Sam’s Club’s “Member’s Mark” and Costco’s “Kirkland Signature,” is a significant factor, with 70% of Costco members in Mexico citing quality as a key reason for renewing their membership.

Both chains boast high membership renewal rates, with Costco achieving over 85% and Sam’s Club around 80%. Their strategic expansion and tailored approach to local markets have also contributed to consistent growth, with annual sales increases of approximately 7% for Sam’s Club and a similarly robust rate for Costco.