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For post-pandemic Gen Z, “clubbing” is becoming more about price than partying, and Sam’s Club exists to capture their admission fee.
Walmart executives told analysts in late June that Gen Z, ages 12 to 27 (born 1997 to 2012), now represents the largest growth demographic for its warehouse-style store chain, Sam’s Club, with membership in that age group growing 63% in two years. (Members must be 18 or older to join.) Sam’s estimates it will have 70 million members by the beginning of 2023, according to PYMNTS.
Meanwhile, membership among millennials (1981-1996) grew 14% according to a Retail Dive report.
Statista data backs up this trend: As of March 2024, 23% of consumers ages 18-28 regularly shop at Sam’s Club, compared with 20% of those ages 30-49 and 19% of those ages 50 and over.
Consumer analysts suggest value for money is a big reason: Having weathered the 2007-2009 Great Recession, the COVID-19 pandemic and record price inflation, Gen Z consumers are exceptionally cost-conscious.
But there are likely other factors at play here, too. And these factors will help determine which other retailers Gen Z prefers.
Summarizing Gen Z’s Preferences and Habits
Gen Z, many of whom are still under 18, is estimated to generate $360 billion in spending in the US annually. At $33 per trip, that works out to about $10,600 per year for households, according to Numerator.
This indicates that they are traveling a lot, in fact averaging 342 trips per household per year.
On each of those trips, that $33 will be spent wisely, since 47% of Gen Zers earn less than $40,000 a year. It may be that frugality is why, in early July, Sam’s Club offered new members the chance to sign up for a membership for just $25, half the price of the basic membership.
Other characteristics also shape where, what and how much Zoomers buy: Only 30% have children, for example, and their shopping baskets are smaller or different than they used to, Numerator reports.
Finally, Gen Z’s intuitive mix of online and in-person activities has made them quick to adopt in-store technology that eliminates friction points, including the Sam’s Club Scan & Go app, which Walmart says one in three Sam’s Club members regularly uses to skip checkout lines.
How does it compare to Costco? Keep reading.
Pedestrians walk past a Forever 21 store (Photo by Justin Sullivan/Getty Images)
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But Gen Z only shops at Sam’s Club
Yet, cheap groceries and Sam’s Member’s Mark private label items aren’t the only things Gen Z is buying. With hyper-cost consciousness and fast-paced technology influencing their choices, where else will Gen Z shop? Here’s what our latest research reveals.
Zoom in on fashion
According to Statista’s analysis, the four most popular fashion chains among Gen Z in 2023 are:
Forever 21: This fast fashion chain attracts 53% of this age group, indicating that its low prices and quick digital checkout trump Gen Z’s preference for sustainable clothing. H&M: Another fast fashion brand, H&M, is favored by 47% of Gen Z. Here, H&M’s sustainability efforts and easy digital shopping likely add to the appeal. Old Navy: This chain is popular with 43% of Gen Z due to its prices, retro ’90s styles, and gender-neutral options (and it even sells school uniforms). JC Penney: Surprisingly, this department store chain attracts 40% of Gen Z overall. Its TikTok feed of 1990s catalogs (i.e. retro) could have something to do with it.
The list also includes:
Abercrombie & Fitch: Tied with regional chain Belk department store for 16th place. Both brands received positive reviews from 23% of Gen Z respondents.
Primark: Though it only operates a limited number of stores in the U.S. and doesn’t have a shoppable website in the U.S., this British retailer is tied with online men’s brand Jack & Jones for the highest rating among 17% of Gen Z.
Zara: This low-cost Spanish chain with around 100 stores in the U.S. and a very small online store ranked last (20th). Only 15% of Gen Z prefer Zara.
Visit the general stores
It’s worth noting that when it comes to consumer packaged goods and general merchandise, 64% of Gen Z say they “always or often” buy store brands, according to Chain Store Age. Nearly half, 51%, choose where to shop because of those brands.
Here are the top three general merchandise stores where Gen Z likes to shop, as tracked in the 2024 Numerator report:
Walmart: According to Numerator’s numbers, 21% of Gen Z shoppers say Walmart is their favorite general store. That’s a smaller percentage of Gen Z who shop at Sam’s Club, based on a separate survey, but the club’s atmosphere is more “adult” and the prices are presumably lower. Amazon: One in 10 Gen Zers default to Amazon when buying general goods. This may be a head-scratcher, but it seems odd considering Amazon’s sheer number of options can make for long shopping trips. Target: Only 8% of Gen Zers list Target as their first choice when buying general goods. Still, that 8% is double the percentage of the general public who choose Target when buying general goods, Numerator reports.
Zoom in on food and drink
Considering you can get a hot dog and drink combo at Sam’s Club for $1.38, it’s no wonder that 42% of Gen Zers cite “value” as the main reason they’ll return to a restaurant, according to the Food Institute.
Gen Z magazine Woke Waves lists their favorite quick-service chains as follows:
Chick-fil-A: The “Eat More Chicken” chain may not be able to beat KFC on price, but it could make up the difference with the quality of its ingredients and speed. McDonald’s: As expected, Mickey Dee’s is a favorite for its price. Gen Z also likes its consistent menu and large number of locations. Taco Bell: This chain’s popularity may be largely down to innovation. Taco Bell frequently tests creative, TikTok-friendly menu items, including vegetarian options (28% of Gen Z are vegetarian or vegan). Burger King, with its plant-based Impossible Whopper, comes in at number five. Wendy’s: Woke Waves magazine attributes the burger chain’s edgy social campaigns and fresh (not frozen) beef to its popularity with Gen Z.
Where’s Starbucks? Gen Z loves the coffee chain, which ranked ninth on Woke’s list, but some may find its prices too high. But there’s an opportunity to win them over: Investopedia reports that Gen Z remains the largest specialty coffee consumer group in the U.S.
What about Costco?
Logically, if cost-conscious Gen Z shoppers are joining Sam’s Club, a significant number of them should also be joining Costco.
Sure enough, they were right: Statista found that 28% of consumers ages 18 to 29 bought groceries at Costco as of March 2024. The rival warehouse chain has a combined membership of 128 million people.
It’s unclear whether Sam’s Club’s Gen Z membership growth is outpacing Costco’s. What might make the difference is that both retailers sell rotisserie chickens for under $5. Which one’s better? Hmm.
Put on your best dad sneakers and hit the club!
