Dive Brief:
- Sam’s Club members are in luck. The warehouse retailer has agreed to serve the Polish hot dogs Costco recently announced were being removed from the store's food court menu, Today reports.
- The Polish sausage had already been removed from Costco menus in California and other areas of the Northwest, and some other areas of the country never sold the hot dog in the first place. Still, the decision to remove the Polish hot dog prompted some anger on social media. “You are ruining my life. I don’t want to buy polish dogs in bulk I want to buy one as I walk out the door,” one person lamented on Twitter.
- About 200 Sam’s Club locations already sell the quarter-pound Polish dogs, Today reports, but starting July 23 they will be offered at 99 cents at all locations “so people everywhere can get their fix,” the company said in a statement.
Dive Insight:
Sam’s Club execs are not hiding the fact they are taking a direct swipe at the competitor Costco by serving up the Polish hot dog, even as consumers are asking for healthier meal options in grocery stores and restaurants.
But it could be a smart way to Sam’s Club to grab a few customers away from a rival that is dominating the marketplace. Despite the fact that both big box stores offer similar pricing and customer experiences, Costco has nearly twice as many cardholders — 91.5 million members in 50 million households, compared with 47 members for Sam’s Club. Costco has 747 clubs, including 200 overseas, as of early this year. Although Sam’s Club is closing 63 stores, there are nearly 600 Sam’s Club locations in the U.S. and Puerto Rico. The more regional BJ’s, which recently filed an IPO, has about 210 locations mostly in the eastern U.S. BJ’s also doesn’t factor into the Polish hot dog vs. healthier food debate, as its stores no longer have food courts, instead featuring Dunkin’ Donuts kiosks.
Some say Costco’s success over its competitor could come down to public perception. Although the competitors both have memberships and sell bulk items at discount prices, they have different customer pools, Walmart-owned Sam’s Club doesn’t have the allure of Costco. As Investopedia reports, having a Costco membership may be seen as entrance to an elite club, because not everyone belongs. On the other hand, a membership to Sam’s Club isn't quite the same, since some could feel the warehouse store is a bulk version of Walmart.
Of course, Costco didn’t drop the Polish hot dog for kicks. The retailer made the move in order to reach health-conscious millennials. The store began rolling out new vegan and vegetarian fare earlier this year. “Not everybody gets as excited about pizza and hot dogs as I do,” chief executive Craig Jelinek told company shareholders in January, noting that the food court menu is a frequent topic of comments dropped in store suggestion boxes, the Seattle Times reports. He touted nutritious options including acai fruit bowls, organic burgers (which began appearing in some stores last summer) and a plant-based protein salad – listed as an “Al Pastor Salad,” which is meatless. Costco will, however, continue to serve its popular $1.50 beef hot dog and soda combo in all food courts.
It would be surprising if Sam Club’s takeover of the Polish hot dog leads the retailer to skyrocket past Costco. But in terms of marketing, the move frankly hits the spot.