Sam's Club, Costco Wholesale Corp. and BJ's Wholesale Club Inc. (pictured) had combined annual revenue of $63.3 billion in 2000, larger than AT&T's yearly take. In the United States, the three clubs operate 871 warehouse clubs, averaging more than 100,000 square feet each. Some 64 million consumers are warehouse club members.
How important are tires to their success? At Sam's Club, the largest of the three warehouse clubs with 491 locations in the U.S. and annual sales of $26.4 billion, tires get the most hits on its Web site, according to a company spokesman.
"Tires represent a very important part of our business, so much so that we have just added a tire selector feature to our Web site that enables members to order tires direct from the manufacturer for delivery to the nearest Sam's Club for quick installation." At present, 900 different skus are offered online at Sam's Club, which sells Michelin, Goodyear, BFGoodrich and Uniroyal tires.
Sam's Club, based in Bentonville, Ark., also expects to open 50 to 55 clubs in the U.S. next year, half of which will be relocations or expansions of existing outlets. Roughly 3,500 skus (all products, not just tires) are offered at a typical Sam's Club warehouse, with membership fees of $30 a year for business members and $35 a year for individuals.
When Modern Tire Dealer called one Sam's Club and asked for four P225/60R16 tires, we were first directed to Goodyear's Allegra all-season touring tire with a 75,000-mile tread-wear warranty. The price was $74.99 per tire or $355.28 for four tires.
For $9 more, the Allegras (or any tire, for that matter) would be mounted and spin balanced "free" for the life of the tires; lifetime tire rotation, new valves and a limited flat repair program also were included in the one-time fee.
Four Goodyear Eagle GPS tires were available for $363.70 out the door. Four Michelin X Radial Plus tires were $494.21, while four BFGoodrich Advantage Plus tires were $321.60. These tires came with tread-wear warranties of 60,000 miles for the Goodyear Eagle GPS, 88,000 miles for the Michelin X Radial Plus and 65,000 miles for the BFGoodrich Advantage Plus.
A store employee said Goodyear tires not in stock would require an eight- to 10-day wait, while Michelin, BFGoodrich and Uniroyal brand tires not in stock would require a wait of five to seven business days. Mounting and balancing is on a first come, first served basis.
At Stoughton, Mass.-based BJ's Wholesale Club, annual revenues are $4.7 billion generated by its 6.6 million club members. BJ's operates 118 warehouse clubs in the eastern U.S.
The company sells Michelin, BFGoodrich and Uniroyal tires with more than 100 tread types and sizes from which to choose. According to BJ's, food accounts for 60% of its annual revenues, with the remaining 40% coming from the sale of office supplies and equipment, consumer electronics, small appliances, auto accessories, tires, jewelry, housewares, health and beauty items and other items.
One of BJ's club managers said tire sales are up at his location this year. "People aren't flying as much; they're driving, and that's pushing up tire sales."
When we checked, a new P225/60R16 Uniroyal Tiger Paw was being offered at BJ's for $52.99 per tire plus $9.95 for mounting, lifetime balancing and tire rotation (every 6,000 miles for the latter), disposal of the old tires and limited flat tire repair. The tread-wear warranty for this tire is 70,000 miles and the $9.95 fee applies to every tire sold.
A BFGoodrich brand Touring T/A (T-rated) was available for $75.99, and a Michelin X Plus Radial for $109.99, the latter with a $50 gift certificate for use at BJ's Wholesale. The manager at this club did not have tread-wear warranty information for Michelin or BFGoodrich tires.
At Costco, based in Issaquah, Wash., sales from its 237 domestic warehouse clubs in 2000 were $32.2 billion.
Costco claims 4.2 million business card holder members, plus 10.5 million Gold Star "executive" members. The annual fee is $45 for business members, plus $35 for extra cards. Gold Star members pay $100 a year, but receive extra perks.
Pricing a P225/60R16 tire at a Costco warehouse club resulted in a strong push for the Kirkland brand, made for Costco by Michelin. An employee at one Costco said he would mount, balance and install a new valve stem, plus offer a complete road hazard guarantee and an 80,000 tread-wear warranty for a Kirkland brand tire for $69.99. The same location also handles Michelin, BFGoodrich and Bridgestone tires.
The price for a Michelin X Radial Plus was $117.99, and for a Bridgestone RE 900 Potenza it was $74.99. The warehouse employee we contacted said he could not get a BFGoodrich brand S- or T-rated tire.
