A unique type of in-store bulk packaging experience awaits customers at PriceSmart, a club store chain with 23 locations in Central America and the Caribbean. The following information is from the March 29, 2006, issue of Warehouse Club Focus; the entire issue presents an in-depth profile of the chain including visits to three stores in Costa Rica.
Up to 6 bulk-fill machines on-site
One of the key concepts PriceSmart developed to offer its business and consumer members an even better value is its bulk packaging program. PriceSmart has up to six special bulk-filling machines that are custom-made for each location. The machines are installed in the back of the clubs.
PriceSmart orders the items in the bulk program in large sacks (that weigh up to 2ꯠ lb each filled), which are placed on top of the machines. The machines are gravity-fed and a PriceSmart employee fills up a durable plastic bag with a set amount of each product.
20 different items bulk bagged
There are 20 items in the bulk program, including rice, beans, dog food, powdered and liquid laundry detergent, liquid softener, disinfectant, cereal, oil, sugar, powdered milk and flour.
PriceSmart developed the program to eliminate most packaging costs while retaining a high quality item. Before the program was introduced, PriceSmart generated gross margins of 2% to 3% on these highly competitive, commodity items. After the program was introduced, PriceSmart was able to lower its retail prices, offering savings up to 20%, while increasing its gross margins.
Packaging Insights offers these reports on the latest club store packaging courtesy of HHC Publishing, Inc., publishers of Warehouse Club Focus.