Sam’s to Offer Hispanics ‘Más’ with New Club
Sam’s Club plans to open a new store that will sell products imported from Mexico to Latino consumers in the U.S. The first Más (Spanish for more) Club will open in Houston during the first half of 2009.
“Más Club will cater to the wants and needs of Hispanic families and entrepreneurs,” Doug McMillon, president and chief executive at Sam’s Club, said in a statement, “Our objective is to create an additional shopping choice that provides currently unavailable value for families, restaurant owners, convenience stores and more.”
Sam’s has been looking for ways to generate additional revenues for the company. Sam’s shoppers will need to purchase a separate membership to join the Más Club.
The new format will sell meats, produce and Hispanic foods and beverages. It will have a full-service meat and seafood counter, gas station and a cafe to sell fresh-made tortillas.
The Más Club will have its own distinct logo and signage will be created for the 143,000 square foot warehouse.
Discussion Questions: What do you think of Sam’s prospects with Más Club? Will other clubs follow suit with similar concepts?
Not a concept for all markets but a great move for places like Houston, San Antonio, LA, and other cities with a very large ethnic population.
Note, the press release talks about not only serving the general population but also serving the small business operator. This is a niche that Sam’s Club has really been focusing on. All of these markets have a lot of small ethnic business that will respond well to this new source of traditional products.
Another great example of what the best retailers need to be doing. Understanding their customer and serving them.
Done well, this will be attractive to Latino and non-Latino consumers…and when I say non-Latino, I refer mostly to consumer groups with out-of-U.S. heritage who are seeking certain product selections that are not always available at chain supermarkets. It is an idea that seems best suited for parts of the country where the independent retail strengths are not as present. Also, the small business angle is very smart as this is an underserved part of the overall population.
It’s an interesting concept. It will not fill an empty space in all markets, but there is room for it.
In Los Angeles, the Hispanic independent grocers dominate (Northgate, Vallarta’s, Superior, etc.). The consumer’s shopping behavior includes visits to them as well as the chain grocers and club stores (Costco and Sam’s), as other comments indicated above, shopping is a family affair and I don’t know how the families will respond to a one-stop shopping location that will drastically change their behavior.
The other issue in Los Angeles is location, where the independent grocers have the advantage, and additional Sam’s club locations might cannibalize them or the Supercenter stores.
The Más concept might be more successful outside of Los Angeles, in markets like Phoenix, where independent grocers don’t have the same role as in Los Angeles, and population growth will sustain Más concepts. Also, Walmart has the benefit of past failures (like Alpha Beta’s Viva Markets, and Von’s Tianguis) to learn what not to do, and how to improve on the concept.
I think it will go pretty well except for the fresh meats. No one is going to be fooled by Walmart meat. They put a service case in a new “Hispanic format” supercenter in the Dallas area and the clerks behind the counter look very lonely. A while back I toured a Costco in Puerto Rico which was merchandised toward the local population. If Walmart can replicate that, they will be very successful.
Assuming that this is very successful in heavily Hispanic areas, will they then change the assortment in the regular Sam’s in that area to be less Hispanic? If they do, it could make the traditional Sam’s more appealing to the non-Hispanic shopper. I think that this will be a winner for them and will be a natural in the large urban areas that have the correct demographics.
Research shows that shopping is a family affair for 1st and 2nd generation Hispanic families. Often 3 generations will be shopping together. Club stores are family oriented channels. So it makes sense that a club store that caters to Hispanic families would be successful. Assuming that they make the assortment for the specific national background of the Latinos in their trading area, they should do well.
The more traditional club stores appeal to families and businesses that can afford to purchase larger quantities and make a bigger spend in order to save money in the longer term. Sam’s Clubs with ethnic market appeal is definitely a concept ready for success. I’m sure that Sam’s will be astute in the way it approaches quantities and pricing to fit the target market depending on demographics and regions. The only concern I would have right now would be the timeliness given the economic situation and ongoing forecasts.
Of course Walmart can afford to experiment with new concepts and store formats more easily than any other retailer. I assume that Sam’s has already tweaked its content in Houston and other parts of the country with a high Hispanic population (other panelists might have observed differently). If that’s the case, Sam’s obviously sees an economic opportunity in the Mas Club idea.
This experiment raises a couple of questions, however: Will Mas Club have crossover appeal to non-Hispanic customers? If not, will it have the critical mass to drive profitable volume? And does Walmart understand whether the Hispanic consumer wants the “assimilated” experience of Sam’s (with the appropriate content and bilingual signing) compared to the more ethnically focused idea behind Mas Club?
Interesting. Why more bricks and mortar? Why not create a store within a store? Is there that much business to justify a separate brand? The Walmart in Cancun caters to the Hispanic food, customs and products consumer. Why would someone belong to both formats?
For a company that traditionally makes wise moves, is usually strategic and at the cutting edge, I don’t see it.
I am sure somehow Walmart will be criticized for this format. I can see it as a sub-plot for Lou Dobbs on CNN. But, not sure how this is any different than any other retailer customizing stores by clusters for different economic levels or ethnic make-up. We spend time commending different retailers with the flexibility to customize inner city stores or rural stores to brands and items most desired by their customer base. Think of all the really great Asian and Italian markets scattered throughout the US with a very specific goal in mind to bring authentic “home grown” brands to an ethnic group.
I think not only is this a good focus on taking care of a niche of customers looking for specific items, but also a good idea for Walmart to build sales and profits in an economy that needs some creativity.
The Mas club is perfect play out of the multicultural marketing strategy book, and it will appeal to the direct immigrants and the first generation. It probably will not strongly appeal to more acculturated Hispanic shoppers except as an occasional “return-to-roots” opportunity. But for the immigrant and their first generation children this will carry strong appeal. It will have the products with which they are very familiar and very comfortable. It will tap a market that many local independents and a few chains such as Fiesta have pretty much owned. It will fit the Walmart paradigm of finding an already developed market with smaller stores and fielding a very large one. One of the important strategies for multicultural marketing, as published in a GMDC study of a couple of years ago, was to be “be culturally relevant” and the Mas club looks very much like it will be based on descriptions. Another strategy was to “carry the right stuff” and this store has clearly embarked upon a program to do just that. Finally, another strategy was to “show that you care” and this store plainly has the opportunity to do that by providing products that its target market will feel good about buying.