Photo – Sam’s Club
Sam’s is back in the business of opening warehouse clubs
Sam’s Club plans to open a new warehouse club next year in Florida. It will be the first new club the chain has opened since 2017.
The second largest warehouse club chain in the U.S. last week said it intends to add 30 new clubs “over the next several years” as it seeks to build on “historic comparable sales growth” sustained since the outset of the pandemic.
“We’ve seen remarkable growth over the past few years with a record number of members, and we’re excited to bring the experience of Sam’s Club to even more markets as we expand our footprint,” Sam’s president and CEO Kathryn McLay said in a statement. “And as we open new clubs in new locations, we’ll continue to innovate so that our members shop and save whether in person or online.”
Sam’s may not have opened new clubs in recent years, but it has invested in its existing locations to make them more welcoming to its members. The majority of the chain’s 600 clubs have been remodeled to be brighter and easier to get around. Service desks have been upgraded to better serve customers and Sam’s Scan & Go checkout technology has found favor with members as have its Scan & Go Fuel and Scan & Ship apps.
The new clubs, which at 160,000 square feet will be about 20,000 square feet larger than the chain’s current warehouses, will include “a significant expansion in the omni-fulfillment footprint allowing for a dedicated space for curbside pickup, delivery to home and ship from club orders.”
Sam’s had been “playing” with curbside pickup before the pandemic, Ms. McLay said in 2021, but quickly made the decision to expedite it when COVID-19 lockdowns were being put in place. Sam’s rolled out the service nationwide in seven weeks. Clubs charge Standard members $4 to pick up orders. Plus members enjoy the service at no additional cost.
Most of the new clubs will include a seafood/sushi island, full-service floral and walk-in dairy and fresh coolers. Sam’s is giving more space for healthcare services to accommodate a larger patient waiting area, health services suites, private consultation rooms and dedicated hearing and optical centers.
The retailer also plans to open five new fulfillment and distribution centers this year as part of a multiyear transformation of its supply chain. The facilities will feature state-of-the-art automation and robotics.
- Sam’s Club Announces New Clubs and Supply Chain Enhancements Fueled by Record Growth – Sam’s Club
- Sam’s Club learned how fast it could move during the pandemic – RetailWire
- Should retailers charge for curbside pickup? – RetailWire
- Will Sam’s Club customers be okay with paying a higher membership fee? – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: Is Sam’s Club on the right track with its plans to open new clubs and fulfillment and distribution centers? What is your assessment of the chain at this point in time?
Poll
Loading …BrainTrust
David Spear
VP, Professional Services, Retail, NCR
Kenneth Leung
Retail and Customer Experience Expert
Sales at warehouse clubs have soared over the course of the past few years – driven first by need to stock up during the pandemic, and now by a desire to buy in bulk to save money when inflation is rampant. Against this backdrop, and its increased membership numbers, it is the right time for Sam’s to expand. The chain also needs to improve visibility in the market as it still plays a distant second fiddle to Costco. However, the improvements to stores layouts and greater efforts around brands and products should help with that and has given Sam’s more confidence to expand.
Yes, I believe Sam’s Club is on the right track. As consumers adjusted their shopping habits and have strived to balance their household budgets, the allure of club-based shopping has increased sharply. That, combined with efforts like Sam’s which has undertaken to improve the overall experience, assortment, and services offered, has accelerated their appeal.
Sounds like Sam’s has spent the last several years being a serious student of the market, front to back. And with a bifurcating economy where value is paramount, the growth opportunity is there. Capital improvements can’t be made all at once. It was smart to pause store growth while they updated existing stores and learned a lot of lessons in the process. Mindful evolution, while learning along the way.
I sure like everything in today’s commentary about Sam’s. They are building a next-generation store.
Consider Scan-and-Go, Scan-and-Go Fuel and Scan and Ship. Space for healthcare suites, for consultations, and more as they look to the future … the expansion of onmi-fullfilment … automation and robotics.
This all should generate lots of conversations at Costco management. It is as if they suddenly decided to take on Costco as Sam focuses on the future and leapfrog to a future store.
Steady and prudent progress are the watchwords for Sam’s growth plans. They have been laser focused with their capital investments, and it’s certainly paying dividends. It’s great to see their priority on store experience, health services, omni capabilities and expedited scan & checkout technologies. All of these contribute to outstanding customer experiences, which will deliver strong ROI.
Sam’s has great brand recognition. Consumers, even those who have never set foot in a Sam’s Club expect that they’ll find great deals there. Given the challenges in the economy that have impacted consumer confidence, this is a great time for Sam’s to move out and grow its market share. And, like every great company, they learn from what they did in the past and design for what they see coming in the future. More fulfillment options for their customers, better in-stocks, better shopping experience for customers, a perfect example of a company extending its value proposition to drive growth.
Sam’s Club has built a resilient and scalable operating model ready to meet the increased demand for warehouse clubs. In a segment dominated by Costco, Sam’s Club has a unique opportunity to differentiate itself through excellence in execution, assortment expansion, compelling pricing, promotional strategies, and improved in-store experiences.
The pandemic has accelerated the significance and interest in the value that warehouse operations have to offer. It will be interesting to see how Sam’s Club strategies to be a clear competitor to Costco via social media channels and personalized emails. A winning combination for Sam’s Club is an increased emphasis on quality, brand assortments, and value.
Sam’s Club (Walmart) is one of the most successful retailers in the world. There’s a reason for that. When they make a decision to stop building/expanding, there was a reason. They don’t build to impress the world with the number of locations. The numbers they are interested in are at the bottom line. They know when to grow, hold, and even divest. Sure, they try new things, but they are methodical and conservative with decisions they make. Growth is good, but only when it makes sense to do so.
The key is right location, right time. Costco proves that warehouse clubs still have their place and not everything has to be “Amazoned.” Find the right location with unfulfilled needs and move in. Convenient “nice to have” spending is being pressured by inflation and the cost of financing free delivery has increased, so discount bulk buying is back in vogue.
Sam’s Club already has a solid customer base, initiatives like investing in existing clubs and equipping upgraded technology will help them harmonize their digital & physical retail. Additionally, strategies like “curbside pickup” and “ship from club” will give customers a remarkable omnichannel experience. In my opinion, Sam’s Club is definitely on the right track and can serve as a role model for other retailers looking to expand in the modern retail world!