The Club Store Effect: Impact of Shopping in Warehouse Club Stores on Consumers' Packaged Food Purchases

Abstract

This article studies the impact of shopping at the warehouse club format on households' purchases of packaged food for the home. In addition to low prices, this format has several unique characteristics that can influence packaged food purchases. The empirical analysis uses a combination of households' longitudinal grocery purchase information, rich survey data, and detailed item-level nutrition information. After accounting for selection on observables and unobservables, the authors find a substantial increase in the total quantity (servings per capita) of packaged food purchases attributable to shopping at this format. Because there is no effect on the nutritional quality of purchases, this translates into a substantial increase in calories, sugar, and saturated fat per capita. The increase comes primarily from storable and impulse foods, and it is drawn equally from foods that have positive and negative health halos. The results have important implications for how marketers can create win–win opportunities for themselves and for consumers.