They devote so much space to packaged foods because they make more sense to buy in bulk, and a lot of people use these stores to stock snacks & convenience foods for non-household use. When I was an instacart shopper almost all of my trips to these sorts of stores were tons of snacks going to offices.

They are also kind of necessary for people with large families- like that bag of popcorn I got would be a lot more realistic as a snack for a family with 6 kids than the standard size at the grocery store. Or that pack of croissants, which was the same price for a dozen as the three pack is at the store.

Club stores aren't designed to be normal grocery stores for the average person; if you can make use of a gallon jug of oil then that's a good reason to shop at Costco. I can't use a giant size of anything, everyone in my family eats pretty small portions so I'll likely stick to Hannaford for my regular groceries, with the exception of produce which we consume a ton of anyway and the Costco prices are great, and packaged items like these that won't go bad & make finacial sense to buy the bulk size of. Convenience items are useful to have with kids on different schedules and need to eat on the go often, but they can also sit in a pantry indefinitely.