MIDDLETON — Chris and Maggie Nelson have a new house and maybe a different place to shop.

The Madison couple have been members of Sam's Club for the past three years but signed up last week for membership at the 153,000-square-foot Costco, scheduled to open here today near the intersection of Highway 14 and the Beltline.

The Nelsons are unsure if they will keep both memberships, but they're open to change at a time of rising prices on food, clothing and gasoline.

"We'll see," said Chris Nelson, 25. "It's kind of to be determined. The thing that will keep us here will be quality."

Like Sam's, which opened on Madison's West Side in 1988, Costco allows its members to buy in bulk. The $10.5 million warehouse store is tucked into the Livesey Co.'s 100-acre Discovery Springs development, which includes several restaurants, Gilda's Club and a 200,000-square-foot office building that will soon open for more than 500 employees of the UW Medical Foundation.

It's unclear what impact Costco's projected 6,000 to 7,000 Madison-area memberships will have on the Sam's Club, but officials with both companies and a retail expert at UW-Madison, say there is room in this market for both.

Wal-Mart, with 7,416 stores worldwide, including 594 Sam's Club stores, last week raised its full-year earnings forecast after second-quarter profits rose more than expected.

Costco reported last month that its fourth quarter will be lower than expected as it delays raising prices amid soaring energy costs. The Issaquah, Wash., company operates 538 warehouses, including 393 in the U.S. and Puerto Rico.

In Wisconsin, Wal-Mart has a foothold of 12 Sam's Clubs while the Middleton Costco is just the second in the state. The other is in Grafton, north of Milwaukee.

"I'm not sure they're really direct competitors even though they have the same warehouse method," said professor Cynthia Jasper, who studies consumer behavior and retail in the School of Human Ecology at UW-Madison. "There's probably room for both at this point."

Jasper said because some of the food and drug items are in larger sizes and are different from those found at conventional stores, it may be more difficult to compare prices at club stores. Shoppers also need to watch how much they buy.

"They may be buying more than they need," Jasper said. "If you buy too much of something and don't use it, it costs you more."

In addition to the new Costco, the big-box shopping scene has been expanding in the Madison area. Last year, Target opened a SuperTarget in Fitchburg while Wal-Mart opened a Supercenter in Monona. Both companies have plans to build in Sun Prairie, where Janesville-based Woodman's also plans to build a grocery store. Farm & Fleet last week opened a 114,000-square-foot store in Verona, its second location in Dane County.

Supplies for business

David Atkinson, manager of the West Side Sam's Club, said the store is focused on the small-business owner. Offerings include name-brand items but also restaurant supplies, fresh meat by the case, bags, and janitorial and office supplies.

"When times are hard and people are trying to stretch (their dollar), that's when we shine," Atkinson said. "This club has been here a very long time and has a large membership base. I'm seeing more and more of those business owners because they need their money to go further."

A Consumer Reports study from last year showed that the average wage of a Costco employee was about $17 per hour. Most of the 170 employees at the Middleton store started at $11 per hour but could be up to $19 to $20 in four to five years. The study said that Wal-Mart employees made about $10 per hour but company officials did not give wages for a Sam's Club.

The report also said that Costcos tend to be in more affluent areas, which matches with the company's decisions to put stores in Middleton and Grafton, and aims at selling higher-quality goods.

HDTVs and luggage

The new Costco store backs up that report.

High-definition televisions from Sony and Panasonic greet visitors at the door, followed quickly by Tumi luggage and Herman Miller office chairs that retail for $500 but are on sale for $292.

Other merchandise includes Canon cameras, Waterford crystal and watches from Cartier, Omega, Tag Heuer and Tommy Bahama.

Calvin Klein is on sale here but so is Grey Goose vodka and Penfolds wine. Costco also has more than 300 items under its own Kirkland line of products, ranging from clothes to food.

Nora McKinley, of Lake Mills, bought a Costco membership last week because she is after a discount on shutters for her home. She will soon be moving to Lake Forest, Ill., but will shop at one of the 12 Chicago-area Costcos.

"I'm always up for a discount," McKinley said. "They have wonderful food items and its a higher quality than Sam's."

Creating a show

Costco store manager Justin Ferguson said produce, stored in a 33-by-35-foot walk-in cooler, is six to eight days fresher than most stores. The production areas for the bakery, deli and meat departments are all in full view of shoppers.

"The whole idea is to create a show so you can see them," said Ferguson, 37, who started with the company in 1991. "We're a very efficient business. We buy right and we price right."

Costco, in many cases, carries only a few product sizes from a few brands.

For example, it stocks just three brands of spaghetti sauce and three brands of toothpaste. Frozen boneless, skinless chicken breasts are available only in 6.5- and 10-pound bags.

There's also a pharmacy but, like grocery and clothing, there might be just one brand and one quantity size. And if its tires you want, Michelin is all that's sold. They can be installed in the service garage.

The top-selling Costco item is its Kirkland brand toilet paper. A package of 36 rolls sells for $16.99.

"Our quality of goods is what separates us. We don't try to compete with a grocery store," Ferguson said. "We have our own niche."