Walmart makes a massive bet to edge out Costco

In this increasingly multifaceted era of retail, it can be difficult for many companies to figure out their identity. 

Thanks to the rise of online shopping, many previously in-person legacy retailers are trying to ramp up their e-commerce capabilities. 

Related: Popular Mexican chain closing all restaurants, no bankruptcy

Sometimes it works. 

In Target’s case, for example, a slow but deliberate investment in its online capabilities gave way to the successful Target Circle 360 program, its paid-membership version of Amazon Prime. 

Others are struggling to find their feet, though. 

JCPenney has significantly lagged behind its competition. 

The once-popular mall retailer still has a giant physical footprint, which confuses inventory and can gum up supply chains.

So it’s been slow to move its inventory online. And it’s struggled with something of an identity crisis; it’s reduced the use of coupons — a feature that helps to attract many shoppers. 

It’s only just now in 2025 that the retailer is investing $1 billion to improve its website and beef up its mobile capabilities.

Retailers must invest more now

Some retailers, however, know exactly who they are. 

Walmart  (WMT)  is one such example. 

America’s largest retailer and employer certainly built its foundation on brick and mortar. 

In fact, with at least one location within 10 miles of 90% of the public, you might even say it’s the exemplary brick-and-mortar success story. 

More Walmart:

• Walmart adds genius new bakery products to take on Costco
• Walmart, Lowe’s give customers big gift for spring season
• Walmart retakes key crown (but Costco is coming for it)
• Walmart makes a major change to delivery service

But Walmart doesn’t define itself by its physical footprint. 

It defines itself more as a customer-focused brand, and several years ago, that meant ramping up online capabilities. 

In 2020, Walmart launched Walmart+, its paid-membership answer to Amazon Prime. 

The offering couldn’t have come at a better time, when most of us were staying at home waiting for the worst of Covid to pass — and ordering a lot online. 

Now, Walmart+ members account for about 50% of the retailer’s e-commerce revenue, though they spend approximately three times as much as nonmembers. 

Walmart makes a big bet

Walmart is known for taking big swings, and now, it’s taking another large one. 

The super retailer just opened a one-million-square-foot distribution center to help service its Sam’s Club warehouses across the Southeast. 

Related: Popular bank closing more locations soon (locations revealed)

The distribution center is located in Jacksonville, Florida — a fast-growing area in the U.S. — and will fulfill and dispatch delivery orders to the following regions: 

• Florida
• Georgia
• South Carolina 
• Puerto Rico

The retailer is always tweaking what works best, too. 

In March, Walmart actually closed a fulfillment center in New Jersey to the surprise of many, though the retailer says it plans to relocate those capabilities elsewhere in the U.S.

Years ago, in 2018, Sam’s Club closed about one tenth of its store fleet to convert them into fulfillment centers, indicating the retailer has been betting big on e-commerce capabilities for quite some time — and is willing to pivot when need be. 

Walmart is making a big bet on Sam’s Club — the closest thing to a Costco rival. 

It announced plans to ramp up openings over the next few years; previously it had hoped to open about 15 stores per year, but has since doubled that number. Now it plans to open about 30 new Sam’s Club locations per year.

#Walmart #massive #bet #edge #Costco