Costco vs Sam's Club: Which Warehouse Wins in 2026

The tariff regime hitting warehouse clubs has fundamentally shifted since February. On February 20, 2026, the Supreme Court ruled 6-3 in *Learning Resources v. Trump* that IEEPA does not authorize the president to impose tariffs. Chief Justice Roberts wrote for the majority that emergency economic powers were never meant to function as trade policy tools.

The win was short-lived. Within four days, President Trump invoked Section 122 of the Trade Act of 1974 to impose a blanket 10% tariff on all imports. Treasury Secretary Bessent announced in early March that Section 122 rates would increase to 15% — the statutory maximum. Twenty-four states have sued to challenge the replacement tariffs, arguing the balance-of-payments conditions required under Section 122 don't apply. Section 122 tariffs are capped at 150 days, creating a ticking clock that expires in late July 2026.

For Costco, this legal whiplash cuts both ways. The Court of International Trade ordered refunds of duties paid under IEEPA, and Costco has pledged to pass recovered tariff charges back to members through lower prices. A class action lawsuit filed in March alleges Costco passed illegal IEEPA tariff costs to consumers rather than absorbing them. Meanwhile, about a third of Costco's US sales come from imported goods, and the company has pulled categories — artificial trees, imported furniture, certain toys — where the tariff math doesn't work at its razor-thin markups.

Sam's Club benefits from Walmart's $713 billion purchasing machine. When tariffs hit a product category, Walmart shifts supply chains across 4,700+ US stores and ~600 Sam's Club warehouses simultaneously. Costco, with ~600 standalone locations and no parent company safety net, has to be more surgical: sourcing domestically, consolidating global buying, and quietly absorbing margin hits on staples like bananas, coffee, and cherry tomatoes rather than passing the full cost through.

The Section 232 auto parts tariffs taking effect in April 2026 add another layer of cost pressure across supply chains. While these target automakers directly, the ripple effects on transportation costs and consumer goods pricing will hit both warehouse clubs — Costco's tire centre operations face the most direct exposure.

The sticker price is misleading. Costco's $65 Gold Star membership buys access to a store that suppresses product markups to near-cost levels. Sam's Club's $50 Club membership gets you into a store with Walmart-level margins on most items. For households spending $5,000+ annually at a warehouse club, Costco's lower shelf prices offset the higher annual fee.

At the premium tier, the math gets more interesting. Costco's $130 Executive membership earns 2% cash back capped at $1,250. Sam's Club's $110 Plus membership earns 2% but caps rewards at $500. A household spending $25,000 annually at Costco earns $500 back, effectively reducing the membership cost to zero. At Sam's Club, that same household hits the $500 cap but still pays $110 — netting $390 in savings versus Costco's $630.

Sam's Club wins decisively on payment flexibility. It accepts Visa, Mastercard, Discover, and Amex in-store and online. Costco restricts in-store purchases to Visa only, forcing cardholders to either carry a dedicated Visa or miss out on their best rewards card. In a tariff environment where every percentage point matters, Sam's Club removes a friction point Costco stubbornly maintains.

Renewal rates tell the loyalty story. Costco's US and Canada renewal rate exceeds 90%, creating a recurring revenue flywheel that underpins the entire business model. Sam's Club doesn't disclose its renewal rate separately from Walmart, but industry estimates place it in the low 80s. That 10-point gap is Costco's moat in a single number.

Walmart counters with diversification Costco can't match. Its $100+ billion e-commerce operation, same-day delivery infrastructure, and Walmart Connect advertising platform give Sam's Club access to digital revenue streams that subsidise the warehouse experience. Sam's Club's Scan & Go mobile checkout — letting shoppers skip the register entirely — represents a tech advantage Costco hasn't replicated.

Kirkland Signature generates an estimated $75+ billion in annual sales across categories from olive oil to golf balls, making it one of the world's largest consumer brands by revenue. Products are priced 20-40% below national brands at comparable quality — a strategy that locks in membership renewals and lets Costco earn slightly better margins on its highest-velocity items.

Sam's Club has invested heavily in repositioning Member's Mark from a budget brand to a quality competitor. Recent reformulations have narrowed the perception gap, and Member's Mark now covers everything from organic produce to premium spirits. But Kirkland's cult following — fuelled by social media virality and consistent quality — gives Costco a brand asset that no amount of reformulation can replicate overnight.

Costco's SKU discipline amplifies the private-label advantage. With ~3,700 SKUs versus ~5,000, each product generates higher volume per item. Higher volume means better supplier terms, lower per-unit costs, and prices that reinforce the membership value proposition. Sam's Club counters with broader selection and retail media revenue through Walmart Connect. For margin-conscious shoppers dealing with tariff-inflated prices, Costco's stripped-down approach delivers more savings per trip.

The risk profiles differ meaningfully. Costco faces membership saturation in North America and relies almost entirely on warehouse foot traffic — tariff disruption to its import-heavy mix is the near-term headwind, but the 150-day Section 122 expiry in July could provide relief. Walmart faces margin pressure from aggressive pricing, regulatory scrutiny across its gig workforce, and the ongoing capital drain of last-mile delivery infrastructure.

For the portfolio: Costco is the higher-quality compounder with the simpler business model and stronger balance sheet. Walmart offers diversification and more growth vectors at a lower multiple. If you can only own one warehouse club stock, Costco's membership flywheel and capital efficiency give it the edge for long-term holders.