• The rapid growth of Amazon Prime was expected by many to cut into Costco’s business.
  • UBS analysts now say customers have different and distinct reasons for shopping at both stores, which reduces the competition they have between each other.
  • Frequent Costco shoppers were more likely to be Prime members, according to a survey done by UBS.

Many expected Amazon Prime’s success to come at the expense of Costco.

As the e-commerce giant’s membership program was rolled out and improved, analysts thought customers were likely to ditch Costco and head to Amazon.

“The risk is that as Amazon continues to improve Prime’s value proposition and add more layers to the Prime service, US households could cancel subscriptions for one or both of the Warehouse clubs. At a minimum, the number of consumers opting to just use Costco and/or Sam’s Club ‘Only’ is likely to continue to decline,” Cowen & Co. wrote in a note to investors in September 2016.

Now, analysts say that the opposite is happening.

According to a survey of 1,500 shoppers, done by UBS and released Thursday, the overlap of Costco shoppers and Amazon members has grown in…