Costco's members are getting younger as millennial and Gen Z shoppers flock to wholesale clubs

• Costco is the latest warehouse club to tout its growing popularity with millennial and Gen Z shoppers.
• The company said half of new sign-ups were under 40, helping to lower the club's average age.
• Sam's Club has reported similar trends as younger shoppers look to stretch their budgets.

One of the hottest clubs for millennials and Gen Z continues to be the wholesale club.

Costco is the latest warehouse brand to tout its growing popularity with younger shoppers, extending a trend that has become increasingly clear over the past few months.

CFO Gary Millerchip said that about half of Costco's new sign-ups this past year were under 40 — a figure that works out to some 2.5 million millennial and Gen Z households paying for memberships.

"This percentage has been growing since COVID-19 and has lowered the average age of our members over the last few years," Millerchip said on Costco's fourth-quarter earnings call on Thursday.

In a survey last year, roughly one in six shoppers between 18 and 35 told GoBankingRates they shop at Costco, especially as they continue to reach "adulting" milestones.

"I admit that I did feel a little older when I became a Costco member," said Dominic Wright, a Gen Z financial planner who told the outlet he's a fan of the company's eyeglasses, contact lenses, and prescriptions.

According to Placer.ai Head of Analytical Research R.J. Hottovy, younger generations are starting families and buying houses in the suburbs, which is a big driving force behind this trend.

"That's been one of those things I don't think has gotten enough attention," Hottovy told Business Insider.

The news echoes results from Sam's Club, the Walmart-owned club store, where Gen Z membership has grown by 68% in the past two years.

While Sam's Club clearly has a technological and convenience advantage over Costco, the main draw of both brands remains low prices on high-quality items.

"That generation believes it's cool to save money, and we agree with them," Sam's Club CEO Chris Nicholas told CNBC in June.

Nicholas' comment points to another major change: a new social attitude about scoring deals.

"If you think back decades ago, there was this stigma about shopping in value-oriented channels," Jefferies retail analyst Corey Tarlowe told BI. "Over time, it's kind of withered away."

Astute viewers of the film "The Wolf of Wall Street" may recall Jordan Belfort's office speech in which he ridicules the idea of a failed salesman pulling up to a traffic light in a beat-up Ford Pinto with "a carload of groceries" from Price Club, which merged with Costco in 1993, around the time the scene was set.

"If you ever went to a TJ Maxx parking lot two decades ago, you probably saw like Nissans and Toyotas," Tarlowe added. "Now you go there and you'll still see the Nissans and Toyotas, but you'll also see BMWs and Mercedes."

Indeed, while so-called store brands were once considered a trade-down from national brands, Costco's Kirkland Signature and Sam's Club's Member's Mark have won a loyal following in stores and on social media.

Now it's trendy to spend a Saturday afternoon wandering the aisles of a warehouse club, munching on free samples, and stocking up on essentials — and that's great news for Costco.