Multiple Sam's Club Stores to close

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Re: Multiple Sam's Club Stores to close

Post by buckguy »

The closing locations are a mishmash of income and geography---I wonder if it was a matter of leases that were expiring and a possible gradual phase out of Sam's with a few places becoming fulfillment (perhaps they have the longer leases). It's odd that their management plan didn't address years and years of stagnation, but assume that they don't mention a lot of stuff.
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Re: Multiple Sam's Club Stores to close

Post by Brian Lutz »

Up here there are some Costcos that are so busy the parking lot is almost always full when you try to go, especially on a weekend (the Kirkland Costco on a Saturday is a particularly bad idea, I swear that place has people buying tires just to be able to park in the tire center spots.) I don't have much recent experience with Sam's Club here, but I know that one of the reasons I liked the Sam's Club in Renton was that I could actually find parking there on a Saturday. To me it seemed like Sam's was much better suited to B2B sales than Costco (and as a result it seemed like a lot of the customers were buying for businesses when I was there, where Costco stores seemed to be mostly direct to consumer business.) There are a couple of locations here that have restaurant supply departments, and in Lynnwood there's a Costco Business Center that's much better suited to the B2B scenarios, but aside from that it seems like they don't do much for business customers now.
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Re: Multiple Sam's Club Stores to close

Post by storewanderer »

It is the same in Reno. Business owners who are buying for resale are primarily at Sam's Club. There are some exceptions of course, but you can really tell. Costco clearly has mostly consumers buying for themselves/large families. Costco knows they can get much better margins out of consumers. Costco's prices are not exactly discounts.
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Re: Multiple Sam's Club Stores to close

Post by pseudo3d »

buckguy wrote: January 14th, 2018, 7:49 pm The closing locations are a mishmash of income and geography---I wonder if it was a matter of leases that were expiring and a possible gradual phase out of Sam's with a few places becoming fulfillment (perhaps they have the longer leases). It's odd that their management plan didn't address years and years of stagnation, but assume that they don't mention a lot of stuff.
In Houston, there were two experimental stores related to Sam's Club, and neither of them lasted long. One of them was Sam's Club Business Center in 2008, which was a major re-do to appeal more to small business customers, targeting "foodservice, convenience stores, vending, office administration, floral operations, hotel/motel and more". Here's a blurb from Business Journals (after it closed) of how dramatically the merchandise mix changed:
As part of the business center makeover, Sam’s Club removed the clothing department, pharmacy and grocery area to make way for increased bulk products. The store also nixed the optical center, tire center and jewelry department, but added an extended copy, print and shipping center.
The store closed just after two years, and was torn down for an apartment complex. There was also Más Club (Sam spelled backwards, but also literally "more"), a Hispanic-oriented Sam's Club type store, which opened in 2009 and closed in 2014.
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Re: Multiple Sam's Club Stores to close

Post by wnetmacman »

buckguy wrote: January 14th, 2018, 7:49 pm The closing locations are a mishmash of income and geography---I wonder if it was a matter of leases that were expiring and a possible gradual phase out of Sam's with a few places becoming fulfillment (perhaps they have the longer leases). It's odd that their management plan didn't address years and years of stagnation, but assume that they don't mention a lot of stuff.
I'm not too sure about that. Most of them that I've seen were in the poorest areas of town. Baton Rouge, for example, moved from bad to worse in its current location that is closing. The Cortana Mall area has been suffering ever since the Mall of Louisiana opened (in 1997). Business has been slowly moving from Cortana to MoL, with the culmination being last year's losses of JCPenney and Sears. Only Dillard's maintains an anchor, and that's a clearance store. The Houston loop store closing was next to what used to be Astroworld, and that isn't a good part of town any more either. To me, it looks like Walmart made some uninformed decisions about real estate in the last few years. The Cortana store was built on a Walmart pad where they held the ground lease. Money saver there, right? Memphis - Getwell Road is in a highly industrial, poorer area of town. The area has dwindled around that store.

The only store in my general area I'm questioning was New Caney, TX. It was only a year old. That isn't enough time to make a fully educated decision about performance.
pseudo3d wrote: January 14th, 2018, 9:18 pm In Houston, there were two experimental stores related to Sam's Club, and neither of them lasted long.
If there's anything we know about Walmart and business decisions, it's that a bad decision or a poorly executed one doesn't last. Anybody remember dot discount drug or Helen's Arts & Crafts? That's because both have been gone for almost 30 years. Bud's Warehouse Outlet? Gone for around 20 years. They don't wait around to fail. It's eat or be eaten.

Sam's Club isn't a bad format. It was modeled after Costco's predecessor, Price Club. It's no surprise that they would want to keep copying the idea, but they aren't moving as fast as Costco is currently. Costco is expanding rapidly and changing to meet the needs of its customers in ways Sam's isn't. My local store was remodeled recently. The format in which it was carried out is just not that great. They eliminated half of the bakery space for a walk in produce cooler. They expanded the meat market into the store and made a fish counter. I don't go to Sam's for that. I go to buy big boxes of stuff at low, low prices.
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Re: Multiple Sam's Club Stores to close

Post by pseudo3d »

wnetmacman wrote: January 14th, 2018, 9:59 pm
The Houston loop store closing was next to what used to be Astroworld, and that isn't a good part of town any more either. To me, it looks like Walmart made some uninformed decisions about real estate in the last few years.

The only store in my general area I'm questioning was New Caney, TX. It was only a year old. That isn't enough time to make a fully educated decision about performance.
Yeah, I don't know about New Caney either. But the Sam's on the Loop wasn't that it specifically was in a bad part of town (I mean, the park and ride is just south of there, and I didn't feel nervous about my car being left there) it's just that it was in an industrial area with little other retail, and the market area it "had" that wasn't drawn to other stores to the south, west, or east, or just bad neighborhoods in general, was just too little to sustain it. The Sam's Club there at Southwest Freeway and 610 is in/near some iffy areas itself but it also draws on a ton of wealthy neighborhoods that also were near the South Loop store.
wnetmacman wrote: January 14th, 2018, 9:59 pm If there's anything we know about Walmart and business decisions, it's that a bad decision or a poorly executed one doesn't last. Anybody remember dot discount drug or Helen's Arts & Crafts? That's because both have been gone for almost 30 years. Bud's Warehouse Outlet? Gone for around 20 years. They don't wait around to fail. It's eat or be eaten.

Sam's Club isn't a bad format. It was modeled after Costco's predecessor, Price Club.
Unlike Walmart Express, Marketside, Supermercado de Walmart, and others, Sam's Club originates out of a very different era of Walmart's history. Bud's Discount City was founded before Sam's death, but it seems pretty clear that Walmart was focused on the Supercenter project (and later, the Neighborhood Market prototype) and did not care to make Bud's Discount City a viable brand, leading to its decline and closure in 1997 (it says that all but about a dozen closed in 1997, but it looks like even the ones they kept open were history by January 1998).
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Re: Multiple Sam's Club Stores to close

Post by arizonaguy »

wnetmacman wrote: January 14th, 2018, 9:59 pm
buckguy wrote: January 14th, 2018, 7:49 pm The closing locations are a mishmash of income and geography---I wonder if it was a matter of leases that were expiring and a possible gradual phase out of Sam's with a few places becoming fulfillment (perhaps they have the longer leases). It's odd that their management plan didn't address years and years of stagnation, but assume that they don't mention a lot of stuff.
I'm not too sure about that. Most of them that I've seen were in the poorest areas of town. Baton Rouge, for example, moved from bad to worse in its current location that is closing. The Cortana Mall area has been suffering ever since the Mall of Louisiana opened (in 1997). Business has been slowly moving from Cortana to MoL, with the culmination being last year's losses of JCPenney and Sears. Only Dillard's maintains an anchor, and that's a clearance store. The Houston loop store closing was next to what used to be Astroworld, and that isn't a good part of town any more either. To me, it looks like Walmart made some uninformed decisions about real estate in the last few years. The Cortana store was built on a Walmart pad where they held the ground lease. Money saver there, right? Memphis - Getwell Road is in a highly industrial, poorer area of town. The area has dwindled around that store.

The only store in my general area I'm questioning was New Caney, TX. It was only a year old. That isn't enough time to make a fully educated decision about performance.
pseudo3d wrote: January 14th, 2018, 9:18 pm In Houston, there were two experimental stores related to Sam's Club, and neither of them lasted long.
If there's anything we know about Walmart and business decisions, it's that a bad decision or a poorly executed one doesn't last. Anybody remember dot discount drug or Helen's Arts & Crafts? That's because both have been gone for almost 30 years. Bud's Warehouse Outlet? Gone for around 20 years. They don't wait around to fail. It's eat or be eaten.

Sam's Club isn't a bad format. It was modeled after Costco's predecessor, Price Club. It's no surprise that they would want to keep copying the idea, but they aren't moving as fast as Costco is currently. Costco is expanding rapidly and changing to meet the needs of its customers in ways Sam's isn't. My local store was remodeled recently. The format in which it was carried out is just not that great. They eliminated half of the bakery space for a walk in produce cooler. They expanded the meat market into the store and made a fish counter. I don't go to Sam's for that. I go to buy big boxes of stuff at low, low prices.
From what I've read, Sam's Club wants to transition to serve a similar demographic as Costco. They don't feel that their focus should be on B2B anymore and instead want to focus on consumers. That's why they're resetting their merchandise mix to have more produce, sushi, etc. while eliminating some items. An article I mentioned was that they are looking at phasing out bulk candy sales.

I'm not sure that this strategy will work well in markets that Costco has a decent presence. In my area (Phoenix) Costco absolutely dominates Sam's Club. I have 6 full line Costco stores and 1 Costco Business Center within a 20 - 25 minute drive of my house versus 2 Sam's Clubs. I am a member of both as there are just enough items I can get at Sam's that I can't get at Costco to make it worthwhile. However, many of these items are targeted more to the B2B market. If Sam's eliminates them there's no longer any incentive to maintain both memberships and I'll keep my Costco membership as I do about 75 - 80% of my warehouse club business at Costco anyways.

I believe Sam's had a lot of good "bones" and was a good format. It just was never promoted right by Walmart (in the way that the Supercenters and Neighborhood Markets were). Sam's slogans and business strategy seemed to change (and still seem to change) every couple of years. This new change to focus on consumers and not the B2B market (along with closing several locations) seems risky when they are operating under a membership model. Members hear about clubs closing (even if it isn't their local store) and fear that other clubs may not be around for much longer. Meanwhile their main competitor Costco is chugging along just fine.
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Re: Multiple Sam's Club Stores to close

Post by pseudo3d »

arizonaguy wrote: February 2nd, 2018, 8:39 am
wnetmacman wrote: January 14th, 2018, 9:59 pm
buckguy wrote: January 14th, 2018, 7:49 pm The closing locations are a mishmash of income and geography---I wonder if it was a matter of leases that were expiring and a possible gradual phase out of Sam's with a few places becoming fulfillment (perhaps they have the longer leases). It's odd that their management plan didn't address years and years of stagnation, but assume that they don't mention a lot of stuff.
I'm not too sure about that. Most of them that I've seen were in the poorest areas of town. Baton Rouge, for example, moved from bad to worse in its current location that is closing. The Cortana Mall area has been suffering ever since the Mall of Louisiana opened (in 1997). Business has been slowly moving from Cortana to MoL, with the culmination being last year's losses of JCPenney and Sears. Only Dillard's maintains an anchor, and that's a clearance store. The Houston loop store closing was next to what used to be Astroworld, and that isn't a good part of town any more either. To me, it looks like Walmart made some uninformed decisions about real estate in the last few years. The Cortana store was built on a Walmart pad where they held the ground lease. Money saver there, right? Memphis - Getwell Road is in a highly industrial, poorer area of town. The area has dwindled around that store.

The only store in my general area I'm questioning was New Caney, TX. It was only a year old. That isn't enough time to make a fully educated decision about performance.
pseudo3d wrote: January 14th, 2018, 9:18 pm In Houston, there were two experimental stores related to Sam's Club, and neither of them lasted long.
If there's anything we know about Walmart and business decisions, it's that a bad decision or a poorly executed one doesn't last. Anybody remember dot discount drug or Helen's Arts & Crafts? That's because both have been gone for almost 30 years. Bud's Warehouse Outlet? Gone for around 20 years. They don't wait around to fail. It's eat or be eaten.

Sam's Club isn't a bad format. It was modeled after Costco's predecessor, Price Club. It's no surprise that they would want to keep copying the idea, but they aren't moving as fast as Costco is currently. Costco is expanding rapidly and changing to meet the needs of its customers in ways Sam's isn't. My local store was remodeled recently. The format in which it was carried out is just not that great. They eliminated half of the bakery space for a walk in produce cooler. They expanded the meat market into the store and made a fish counter. I don't go to Sam's for that. I go to buy big boxes of stuff at low, low prices.
From what I've read, Sam's Club wants to transition to serve a similar demographic as Costco. They don't feel that their focus should be on B2B anymore and instead want to focus on consumers. That's why they're resetting their merchandise mix to have more produce, sushi, etc. while eliminating some items. An article I mentioned was that they are looking at phasing out bulk candy sales.

I'm not sure that this strategy will work well in markets that Costco has a decent presence. In my area (Phoenix) Costco absolutely dominates Sam's Club. I have 6 full line Costco stores and 1 Costco Business Center within a 20 - 25 minute drive of my house versus 2 Sam's Clubs. I am a member of both as there are just enough items I can get at Sam's that I can't get at Costco to make it worthwhile. However, many of these items are targeted more to the B2B market. If Sam's eliminates them there's no longer any incentive to maintain both memberships and I'll keep my Costco membership as I do about 75 - 80% of my warehouse club business at Costco anyways.

I believe Sam's had a lot of good "bones" and was a good format. It just was never promoted right by Walmart (in the way that the Supercenters and Neighborhood Markets were). Sam's slogans and business strategy seemed to change (and still seem to change) every couple of years. This new change to focus on consumers and not the B2B market (along with closing several locations) seems risky when they are operating under a membership model. Members hear about clubs closing (even if it isn't their local store) and fear that other clubs may not be around for much longer. Meanwhile their main competitor Costco is chugging along just fine.
Sam's Club is not and will never be Costco, and I believe the two have a distinctly different customer base. Sam's Club is in a lot of smaller, less affluent markets that Costco wouldn't touch, and SC has a far older customer base than Costco does (or at least that's my impression).
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Re: Multiple Sam's Club Stores to close

Post by arizonaguy »

pseudo3d wrote: February 2nd, 2018, 6:47 pm
arizonaguy wrote: February 2nd, 2018, 8:39 am
wnetmacman wrote: January 14th, 2018, 9:59 pm

I'm not too sure about that. Most of them that I've seen were in the poorest areas of town. Baton Rouge, for example, moved from bad to worse in its current location that is closing. The Cortana Mall area has been suffering ever since the Mall of Louisiana opened (in 1997). Business has been slowly moving from Cortana to MoL, with the culmination being last year's losses of JCPenney and Sears. Only Dillard's maintains an anchor, and that's a clearance store. The Houston loop store closing was next to what used to be Astroworld, and that isn't a good part of town any more either. To me, it looks like Walmart made some uninformed decisions about real estate in the last few years. The Cortana store was built on a Walmart pad where they held the ground lease. Money saver there, right? Memphis - Getwell Road is in a highly industrial, poorer area of town. The area has dwindled around that store.

The only store in my general area I'm questioning was New Caney, TX. It was only a year old. That isn't enough time to make a fully educated decision about performance.



If there's anything we know about Walmart and business decisions, it's that a bad decision or a poorly executed one doesn't last. Anybody remember dot discount drug or Helen's Arts & Crafts? That's because both have been gone for almost 30 years. Bud's Warehouse Outlet? Gone for around 20 years. They don't wait around to fail. It's eat or be eaten.

Sam's Club isn't a bad format. It was modeled after Costco's predecessor, Price Club. It's no surprise that they would want to keep copying the idea, but they aren't moving as fast as Costco is currently. Costco is expanding rapidly and changing to meet the needs of its customers in ways Sam's isn't. My local store was remodeled recently. The format in which it was carried out is just not that great. They eliminated half of the bakery space for a walk in produce cooler. They expanded the meat market into the store and made a fish counter. I don't go to Sam's for that. I go to buy big boxes of stuff at low, low prices.
From what I've read, Sam's Club wants to transition to serve a similar demographic as Costco. They don't feel that their focus should be on B2B anymore and instead want to focus on consumers. That's why they're resetting their merchandise mix to have more produce, sushi, etc. while eliminating some items. An article I mentioned was that they are looking at phasing out bulk candy sales.

I'm not sure that this strategy will work well in markets that Costco has a decent presence. In my area (Phoenix) Costco absolutely dominates Sam's Club. I have 6 full line Costco stores and 1 Costco Business Center within a 20 - 25 minute drive of my house versus 2 Sam's Clubs. I am a member of both as there are just enough items I can get at Sam's that I can't get at Costco to make it worthwhile. However, many of these items are targeted more to the B2B market. If Sam's eliminates them there's no longer any incentive to maintain both memberships and I'll keep my Costco membership as I do about 75 - 80% of my warehouse club business at Costco anyways.

I believe Sam's had a lot of good "bones" and was a good format. It just was never promoted right by Walmart (in the way that the Supercenters and Neighborhood Markets were). Sam's slogans and business strategy seemed to change (and still seem to change) every couple of years. This new change to focus on consumers and not the B2B market (along with closing several locations) seems risky when they are operating under a membership model. Members hear about clubs closing (even if it isn't their local store) and fear that other clubs may not be around for much longer. Meanwhile their main competitor Costco is chugging along just fine.
Sam's Club is not and will never be Costco, and I believe the two have a distinctly different customer base. Sam's Club is in a lot of smaller, less affluent markets that Costco wouldn't touch, and SC has a far older customer base than Costco does (or at least that's my impression).
I agree that they have two distinct customer bases.

I disagree that Sam's Club's base is older. In my area (metro Phoenix) Costco seems to far and away have an older customer base. Many Costco customers here have been members since it was Price Club. Plus the Costco members tend to be upper middle class whereas Sam's Club members tend to be working class to lower middle class.

However, according to the Walmart investor presentation, Sam's Club wants to re position itself to serve middle class families with incomes of $75,000 - $125,000 a year (which seems to be Costco's target). Sam's Club also wants to build up its Members Mark private label to be similar to that of Kirkland Signature.
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Re: Multiple Sam's Club Stores to close

Post by buckguy »

The idea that they want to reboot is kindof funny and doesn't fit with closing stores in relatively upscale areas. The funny part is that moving upscale is very difficult to do and selling suchi at Sam's isn't going to do it. I also doubt that they do all that well with B2B. The norm rather than the exception with small businesses seems to be that you find all kinds of Kirkland products (i.e., Costco) in the bathrooms, behind the register, etc. WM has a chronically underpeforming operation that will never be dominant in its niche and the best thing they can do is quietly phase it out and that may be the real strategy here.
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