Consumption Trends and the Warehouse Club Retail Format

Abstract

Is there is a connection between the emergence of the warehouse clubs and Americans’ unparalleled consumption levels? Since emerging in 1983, warehouse club growth has outpaced that of traditional grocery stores. Individual consumption in the US has grown concurrently. Using standard principles from microeconomics, we postulate that consumers’ increasing acquisitiveness is sufficient to explain (i) why warehouse clubs have grown at a faster rate than the traditional retailers; and (ii) how the emergence of the warehouse club may have accelerated the growth in personal consumption.