Malls are dead. What happens if Amazon also kills Costco, Sams Club and BJ’s?

Photo above – Luke Wilson and Maya Rudolf prepare to shop at Costco in the 2006 film “Idiocracy”

Streaming is killing cable, because of cable box subscriber fees. Could the same happen to warehouse clubs like Costco and Sam’s Club? How many annual or monthly fees will someone endure before surrendering? Cracks are starting to appear in the façade. Costco is offering "limited time deals" on membership. (See link below).

Warehouse club annual memberships cost from $50 to $120 annually, depending on how much sales resistance you have when they pound you with upgrade offers at checkout. So far I find it easy to brush off their co-branded credit card, which only drags down your FICO score and has hilarious high interest rates compared to most other cards.

Costco can be the most expensive annual membership among warehouse clubs. $65 for entry level basic features, but $120 popularly equipped with a 2% gas discount. That might work for you if (1) your local Costco actually has gas pumps, (2) you don’t own an electric car, and (3) there’s no off-brand discount filling station 2 blocks away. If you can check all those boxes, then you only have to pump 400 gallons a year at Costco to break even.

Although Costco is blanketing America with news of their “limited time” membership discounts, the company doesn’t appear to be circling the drain yet. Corporate profits have been increasing about 8% annually, since forever. But that means they’re now a mature company, not a growth stock.

In 2025 Costco earned $8.X billion. On 128 million members. That works out to . . . ca-ching . . . about $62 profit per household. Without the annual fees, they appear to be losing money. Warehouse clubs would probably be more profitable on a household level if we shopped there less often, and simply paid the annual dues.

Here’s why I’m ending my warehouse club membership. I can get everything I need from Amazon, without having to park a football field away from the store entrance, spend an hour roaming through the retail version of the Great Pyramid of Cheops, and wait another 15 minutes for checkout. Then slog back to the car in the rain. It's why malls are dying in general.

I’ve been experimenting with Amazon for paper towels and bathroom tissue, to see if I can ditch Costco. Amazon costs about the same on a per sheet basis, and I get 5% back at Amazon, and it’s delivered right to my door. Ginormous packages of paper and soda are the reason Costco exists in the first place. The ability to completely fill the trunk of your Honda Civic with a package of Bounty paper towels the size of a doghouse. That’s not the size I’m ordering from Amazon, but the cost per sheet turns out to be the same. And I earn 5% rewards.

Today's column is NOT a promo for Amazon. Here's why I’m still skeptical about their ability to drive a nail in the coffin of their warehouse club competitors. Amazon Prime Video streaming is THE WORST. It takes forever to load the show, and you have to endure that endless herky-jerky spinning wheel before it starts. And you spend 5 minutes navigating the menu to find what you want.

Amazon has retail pricing power and fast front door delivery. And since I’m getting Amazon Prime video “at no extra cost” with my retail shopping, I’m giving their hideous streaming faults a pass. But look out, Comcast, Peacock, YouTube, Netflix, Disney, Sony Pictures, Apple TV, and ESPN Unlimited. Some of you guys are on about to get cut from my subscriptions. People aren’t made of money, you know.

I’m just sayin’ . . .



Costco Quietly Launches Rare Membership Discount — Here’s Who Qualifies