Sam's Club to focus Member's Mark on sustainability

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Re: Sam's Club to focus Member's Mark on sustainability

Post by babs »

ClownLoach wrote: May 6th, 2022, 12:06 pm
Romr123 wrote: May 3rd, 2022, 5:21 am Sounds like Sams and BJs are converging around a model of being the anti-Costco. Though we gave up our BJs membership, Costco has become so unpleasantly crowded (rather similar to our feelings about Trader Joes) that we only shop online there (which has some interesting treasure-hunt aspects, TBH).
Costco had 63 million members. Most families are unlikely to pay for a membership at two. clubs. That's the hurdle Sam's has to overcome. A tall order that could take many years. Buying BJs is probably a smarter move. BJs has a larger focus on grocery with a much wider selection than Sam's or Costco but in nonfood areas, Costco wins. I suspect most BJs customers shop there due to their strong grocery selection compared to the other clubs. So Sam's buying it and making drastic changes might drive customers away.
It is clear that Sam's is focused on being the most convenient club store, with the remodeled stores with bright and clean navigational signage (something that is generally not present elsewhere), implementation of a consistent Floorplan so store layouts are more similar and the stores now all have a logical flow (versus the Sam's of the past where it seemed like they just threw pallets down the aisles to fill holes instead of logically merchandise the store), and of course the Scan and Go which is best in class for the entire retail industry. I suspect that they are conducting focus groups of frustrated Costco shoppers, learning what the friction points are for their customers, then intentional implementation of fixes for those pain points to attract those customers. And the comments about Costco customers skewing older is noticeable when you shop at Sam's - they are definitely attracting a younger shopper through the technology they're rolling out.

Again I am convinced they finally after decades of messing around with their merchandise, membership plans, and store formats they finally have got it right - and they are finally in a place where they can start to expand again slowly to fill in where they have coverage gaps. More importantly they are making their stores better places to shop so they don't get completely demolished when a Costco enters the market like they used to. Now I think they could start opening up in new markets near a Costco and take their share (except for the "Costco headquarters" markets - PNW where Costco started in the 70's and dominates, and San Diego where Price Club also started in the 70's - both markets have 4+ generations of loyalty to their hometown brand).

I've never seen a BJ's but it sounds like they are smaller stores that skew more towards a grocery store competitor and don't go head to head with Costco? Would a Sam's acquisition of BJ's be possible where they are all converted to the newest Sam's prototype, or are the stores too different in size or format?
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Re: Sam's Club to focus Member's Mark on sustainability

Post by Romr123 »

BJs is new into metro Detroit (they have been in Cleveland for about 10 years which previously was their furthest NW extent) and seem to be doing all right coming in. I had a membership when I lived in Atlanta 20 years ago, and we got a membership here. They are definitely heavier grocery than Costco; with a service deli and full-line produce (produce reminds me of Smart and Final, TBH, though EDLP not promotional). They have tire/battery bays, do not have pharmacy but do have things like magazines/greeting cards; and a better selection of specialty imported pantry items than you get anywhere (things like large jars of olives/artichokes/olive oil/etc). If I were to guess, they've got a particularly skilled buyer of this type merchandise (probably named Salvatore) who does an amazing job....not sure they'll be able to keep it up after Sal retires.

I shopped there bi-weekly until early in the pandemic I got irritated (they have coupon books like Costco plus accept manufacturer's coupons), During the pandemic they started to refuse their own coupon books and mfgr coupons, as they forced you to upload to their app; ostensibly to reduce contact by the checker. After an unpleasant encounter about it, I just gave up and didn't bother renewing membership.
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Re: Sam's Club to focus Member's Mark on sustainability

Post by buckguy »

BJ's has been in the Cleveland area for at least 20 years. Both they and Sam's predated Costco. BJ's definitely has a following, partly because of the groceries. I'm surprised they haven't expanded more in DC whereas they are well represented in Baltimore.

One problem with Sam's that they built quite a few near Walmarts which probably didn't help them develop a clear identity. They have done so poorly for so long, that I suspect it will take a few years to tell whether they really have turned a corner. Also, when Walmart got rid of their various underperforming foreign entities recently, they retained equity shares in most of them. Their recent willingness to invest in Sam's might be a prelude to shopping the chain but retaining a piece of the business.
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Re: Sam's Club to focus Member's Mark on sustainability

Post by ClownLoach »

buckguy wrote: May 9th, 2022, 10:31 am BJ's has been in the Cleveland area for at least 20 years. Both they and Sam's predated Costco. BJ's definitely has a following, partly because of the groceries. I'm surprised they haven't expanded more in DC whereas they are well represented in Baltimore.

One problem with Sam's that they built quite a few near Walmarts which probably didn't help them develop a clear identity. They have done so poorly for so long, that I suspect it will take a few years to tell whether they really have turned a corner. Also, when Walmart got rid of their various underperforming foreign entities recently, they retained equity shares in most of them. Their recent willingness to invest in Sam's might be a prelude to shopping the chain but retaining a piece of the business.
One interesting note here - it seems to be obvious, at least in Southern California - that standalone Sam's Club locations outperform side by side Sam's/WM locations. Not sure if there is a lot of science to this as they have less side by side here than in the rest of the country, but I saw similarities in Las Vegas too. Sam's is no longer targeting the same customer, they have moved more upscale.
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Re: Sam's Club to focus Member's Mark on sustainability

Post by arizonaguy »

ClownLoach wrote: May 10th, 2022, 1:41 pm
buckguy wrote: May 9th, 2022, 10:31 am BJ's has been in the Cleveland area for at least 20 years. Both they and Sam's predated Costco. BJ's definitely has a following, partly because of the groceries. I'm surprised they haven't expanded more in DC whereas they are well represented in Baltimore.

One problem with Sam's that they built quite a few near Walmarts which probably didn't help them develop a clear identity. They have done so poorly for so long, that I suspect it will take a few years to tell whether they really have turned a corner. Also, when Walmart got rid of their various underperforming foreign entities recently, they retained equity shares in most of them. Their recent willingness to invest in Sam's might be a prelude to shopping the chain but retaining a piece of the business.
One interesting note here - it seems to be obvious, at least in Southern California - that standalone Sam's Club locations outperform side by side Sam's/WM locations. Not sure if there is a lot of science to this as they have less side by side here than in the rest of the country, but I saw similarities in Las Vegas too. Sam's is no longer targeting the same customer, they have moved more upscale.
Interestingly enough both Sam's Clubs in the Phoenix, AZ area that closed in 2018 were considered "side by side" to Walmart. One was across the parking lot (Scottsdale) and one was across the freeway but in a phase of the same development (Chandler). The Scottsdale one was also across the street from an always packed Costco.
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Re: Sam's Club to focus Member's Mark on sustainability

Post by ClownLoach »

arizonaguy wrote: May 10th, 2022, 1:54 pm
ClownLoach wrote: May 10th, 2022, 1:41 pm
buckguy wrote: May 9th, 2022, 10:31 am BJ's has been in the Cleveland area for at least 20 years. Both they and Sam's predated Costco. BJ's definitely has a following, partly because of the groceries. I'm surprised they haven't expanded more in DC whereas they are well represented in Baltimore.

One problem with Sam's that they built quite a few near Walmarts which probably didn't help them develop a clear identity. They have done so poorly for so long, that I suspect it will take a few years to tell whether they really have turned a corner. Also, when Walmart got rid of their various underperforming foreign entities recently, they retained equity shares in most of them. Their recent willingness to invest in Sam's might be a prelude to shopping the chain but retaining a piece of the business.
One interesting note here - it seems to be obvious, at least in Southern California - that standalone Sam's Club locations outperform side by side Sam's/WM locations. Not sure if there is a lot of science to this as they have less side by side here than in the rest of the country, but I saw similarities in Las Vegas too. Sam's is no longer targeting the same customer, they have moved more upscale.
Interestingly enough both Sam's Clubs in the Phoenix, AZ area that closed in 2018 were considered "side by side" to Walmart. One was across the parking lot (Scottsdale) and one was across the freeway but in a phase of the same development (Chandler). The Scottsdale one was also across the street from an always packed Costco.
Makes sense. I wonder how much the membership has churned because of how low end Sam's used to be - they were just Walmart in bulk and that's a difficult customer. That's why so many older Los Angeles area locations are in lower income areas even though they aren't necessarily next to Walmart while Costco mainly is in middle class and up only. Now I believe they attract Costco customers looking for something different, they're a better restaurant supplier than Costco now, and they are more focused on small business than Costco (outside of their very limited number of Business Centers which run limited hours only 6 days a week). This change in desired demographic plus purge of stores that didn't have a future is why I am bullish on Sam's growing exponentially in the future if Walmart lets them put the pedal to the metal and funds expansion in the right areas. I think they still have more stores in the US than Costco. In China, they dominate Costco (they are up to 36 warehouses across China all massively high volumes compared to 2 Costco stores). They just built too many next to Walmart and over time may need to relocate most of them. Considering how many times Costco moves their stores it seems like fixing the Sam's fleet isn't a difficult task.
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Re: Sam's Club to focus Member's Mark on sustainability

Post by Alpha8472 »

Sam's Club has been desperate for new members in the past few years. I got a deal a couple of years ago where I got a free gift card equivalent to the membership fee. They have done deals continuously for the past few years. You just have to look for them. Slickdeals has one now for $15.

You can get the deals if you had a membership before. Supposedly if you use a different email Sam's Club will think you are a new member. I upgraded to a higher level of membership at a cash register and the cashier gave me a gift card for the equivalent I paid. The upgrade was like it was free.
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Re: Sam's Club to focus Member's Mark on sustainability

Post by ClownLoach »

Alpha8472 wrote: May 15th, 2022, 9:14 am Sam's Club has been desperate for new members in the past few years. I got a deal a couple of years ago where I got a free gift card equivalent to the membership fee. They have done deals continuously for the past few years. You just have to look for them. Slickdeals has one now for $15.

You can get the deals if you had a membership before. Supposedly if you use a different email Sam's Club will think you are a new member. I upgraded to a higher level of membership at a cash register and the cashier gave me a gift card for the equivalent I paid. The upgrade was like it was free.
I don't think they plan for membership to be the profit core of the company, unlike Costco. They are making little effort to promote the more expensive plus membership aside from a pop up on the checkout screen. Costco actively walks the lines looking for big ticket items to offer upgrades. Sam's is more interested in credit card signups. But I think the discount membership is in line with the change in target customer; the past Sam's customer probably isn't interested anymore in the more pricy, upscaled products versus the old "Walmart in bulk" model. So they've got to replace a lot of members and are willing to subsidize it, but they probably won't ever eliminate the membership because of the value in the data sales from knowing their customers (the Sam's privacy policy is very weak compared to Costco). They are using new systems which are catching the membership cancelations and repeat promos though (it caught us). Now they scan the drivers license barcode at signup using their new customer service tablets. It's so automated that all the rep did was scan a Pre printed card, my ID, and took my picture with an iPad then showed me my name, address and phone on the screen asking if it was correct. Must all be coming from a database because I don't think your phone number is in the driver's license barcode.
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Re: Sam's Club to focus Member's Mark on sustainability

Post by ClownLoach »

In the Walmart earnings release that just came out - the Sam's Club division is absolutely on fire. 10% comp increase and two year stack comps increase over 17%. Walmart itself was only up 3% and acknowledged that really is a decrease because of inflation and that their customer basket size at Walmart stores was down, and they haven't grown e-commerce at all versus a year ago despite all the money they have poured into it (at the expense of the rest of the store standards). Who would have thought Sam's Club would ever be carrying Walmart Corp. and not the other way around?
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Re: Sam's Club to focus Member's Mark on sustainability

Post by babs »

ClownLoach wrote: May 17th, 2022, 8:59 pm In the Walmart earnings release that just came out - the Sam's Club division is absolutely on fire. 10% comp increase and two year stack comps increase over 17%. Walmart itself was only up 3% and acknowledged that really is a decrease because of inflation and that their customer basket size at Walmart stores was down, and they haven't grown e-commerce at all versus a year ago despite all the money they have poured into it (at the expense of the rest of the store standards). Who would have thought Sam's Club would ever be carrying Walmart Corp. and not the other way around?
The warehouse sector is benefitting by high gas prices and overall inflation driving traffic. Yet Costco keeps pulling ahead with same store sales up over 14% last quarter. The challenge for Sam's is trying to flip members from Costco, as I don't think there are a lot of people without memberships and are open to getting one. That's a daunting challenge.
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