Sam's Club Adding 30+ New Stores in First Expansion in years

[ClownLoach]

Not to brag but I predicted this here quite some time ago.

https://www.cnbc.com/2023/01/26/walmart ... tores.html

[arizonaguy]

They're planning on opening up 30 stores within the next 5 years and an unknown number of new stores in the 2 years after. It's a less aggressive expansion plan than the one that Costco is on (I believe they're around 15 stores per year domestically) but at least a Walmart division is opening new stores.

I live near a recently renovated Club and find I am splitting my warehouse club shopping 50/50 between Sam's and Costco whereas a few years ago it was 75/25 in favor of Costco.

[ClownLoach]

They're planning on opening up 30 stores within the next 5 years and an unknown number of new stores in the 2 years after. It's a less aggressive expansion plan than the one that Costco is on (I believe they're around 15 stores per year domestically) but at least a Walmart division is opening new stores.

I live near a recently renovated Club and find I am splitting my warehouse club shopping 50/50 between Sam's and Costco whereas a few years ago it was 75/25 in favor of Costco.

Costco is still split between relocations and net new stores annually, and half of the new stores are Business Centers. So that would net out about 3 to 4 true new stores annually at Costco. Either way there is a lot of runway for the new and improved Sam's. More importantly they are going to get their own DCs. Sam's is much better today than a few years ago but still could significantly improve sales if they could improve their speed to replenish. If Costco runs out of an item today that is in stock at the DC it absolutely will be back in stock by opening tomorrow. Sam's can't say the same. Fixing that area alone will deliver another few years of membership increases and double digit comps. And more competition is good for everyone. I wonder if they will get back into the PNW and South OC/San Diego markets, aka "Costco Country". Sam's also already has a higher store count than Costco in the US (600+ Sam's vs 584 Costcos) even after a couple of waves of closures so this will prevent Costco from overtaking them in domestic count. I doubt any of the 30+ New stores will be relocations; anything that needed to be moved got closed instead in the last wave. They are even remodeling the few remaining old stinkers like the Moreno Valley store. It was like a Sam's time warp to the early 90s with a terrible layout and dirty/worn out environment. They should be a 100% remodeled chain on the same consist prototype by the end of this year if not sooner - how many other retailers can boast about their entire chain being on one current prototype? Great for a consistent customer experience even though their layouts do have subtle variations that don't get updated in the remodel (such as some where all fresh departments are on a side wall vs all on a back wall).

Costco has also been very aggressive over time with relocating stores vs remodeling. They have locations that are already on their third building in 20 years such as Torrance, CA. They went to sequential store numbers a long time ago and if it moves it gets a new number now. The new store that opened recently in Murrieta is #1390. They have about 800 stores worldwide which means in their history they have moved around 600 locations. And prior to the Costco/Price Club merger they didn't change store numbers when they moved, so the relo count may be even higher.

Now if Sam's could just figure out how to run a good food court... They are still pretty terrible in their execution despite having a better menu than Costco these days. They still have unpredictable "sorry, we are closed" days, close early, and have wildly inconsistent staffing levels and queue lengths. They really should consider closing it down and giving the space to something more productive if they aren't interested in running the business correctly.

[storewanderer]

Could this be a play to formally separate Sam's from Wal Mart and give it a bit of a "launch" as an expanding enterprise?

Sam's should re-enter some of the markets they left but without using the Wal Mart distribution network doing so is going to be that much harder.

Food court in the Reno Sam's is always open until the store closes. It is chaotic and I am not overly confident in its cleanliness but for the price you can't get a better pizza slice deal or "brownie sundae." Also I know the churro and pretzel are frozen pre-made things they run through the pizza oven but for $1 they are also a solid deal.

[jamcool]

And Sam’s still takes cash at their snack bar, unlike Costco. I don’t care to put a hot dog on a credit card.

[babs]

And Sam’s still takes cash at their snack bar, unlike Costco. I don’t care to put a hot dog on a credit card.

They still take cash if you go up to the counter. It might be a bit of a wait but I still see plenty of people still paying cash. I totally get why they went to mostly kiosk sales. No one seriously expects full-service on a $1.50 hot dog these days. I'd love to know the real financials behind it.

[babs]

Living in the Pacific NW, I no longer get to see much of Sam's but I was recently in Salt Lake City and went to both the "world's largest" Costco and the Sam's just a block or so away. The Costco was packed with most registers running. Went to Sam's, they had one staffed register and self-checkout. Neither had a long line.

As I walked around I found the prices to be competitive, even lower on some items than Costco. Some of the hardware and pet products were a good deal. I felt the food selection was on par with Costco with one exception. Sam's seemed to only have national brands. Costco does a pretty good job of bringing in national and smaller brands that are purchased through regional buyers to round out the selection. That's a bit of a miss.

The place where Sam's needs work is on what I call the center of the club store. Comparing to Costco, the furniture was subpar for the price. Some of the seasonal items seems junky. These products are front and center, and thus are really visible.

After my visit, I did have a higher impression of Sam's than I did before. I think they are more price competitive than Costco right now but it still needs some work. And they have a long way to go to get the sales volume that Costco has but for now it's an easier in and out on a Saturday.

[storewanderer]

Living in the Pacific NW, I no longer get to see much of Sam's but I was recently in Salt Lake City and went to both the "world's largest" Costco and the Sam's just a block or so away. The Costco was packed with most registers running. Went to Sam's, they had one staffed register and self-checkout. Neither had a long line.

As I walked around I found the prices to be competitive, even lower on some items than Costco. Some of the hardware and pet products were a good deal. I felt the food selection was on par with Costco with one exception. Sam's seemed to only have national brands. Costco does a pretty good job of bringing in national and smaller brands that are purchased through regional buyers to round out the selection. That's a bit of a miss.

The place where Sam's needs work is on what I call the center of the club store. Comparing to Costco, the furniture was subpar for the price. Some of the seasonal items seems junky. These products are front and center, and thus are really visible.

After my visit, I did have a higher impression of Sam's than I did before. I think they are more price competitive than Costco right now but it still needs some work. And they have a long way to go to get the sales volume that Costco has but for now it's an easier in and out on a Saturday.

That easier in and out combined with a more convenient location is why I've been going to Sam's for many years, despite knowing it was an inferior store to Costco.

I think the regional food brand thing varies a little bit with Sam's. The Reno Sam's- I have the same impression as you- they sell basically the biggest national brands only (and some private label) but regional brands or semi-regional brands are not present. However in some CA Sam's I see a lot better effort on regional brands as well as ethnic foods (see those even at Costco in Reno though, and Sam's definitely has the space to have more stuff).

I also think the Sam's remodels are drastically improving their perishable food program. At this point their produce variety is far better than Costco, and I can only think of one time in the past couple years I took something back for a refund due to a quality issue. They also seem to have more prepared/ready to eat food, some of that has been very good.

I don't think Sam's does great on impulse buy/seasonal type items. Furniture other than basic stuff like a bed frame is a hard pass at Sam's. I've had some clothing purchases that I was happy with (all were clearance though). I also think Sam's does a better job than Costco on the "kitchen electrics" category and hard home category in general. They may just present the items better.

[Super S]

Living in the Pacific NW, I no longer get to see much of Sam's but I was recently in Salt Lake City and went to both the "world's largest" Costco and the Sam's just a block or so away. The Costco was packed with most registers running. Went to Sam's, they had one staffed register and self-checkout. Neither had a long line.

As I walked around I found the prices to be competitive, even lower on some items than Costco. Some of the hardware and pet products were a good deal. I felt the food selection was on par with Costco with one exception. Sam's seemed to only have national brands. Costco does a pretty good job of bringing in national and smaller brands that are purchased through regional buyers to round out the selection. That's a bit of a miss.

The place where Sam's needs work is on what I call the center of the club store. Comparing to Costco, the furniture was subpar for the price. Some of the seasonal items seems junky. These products are front and center, and thus are really visible.

After my visit, I did have a higher impression of Sam's than I did before. I think they are more price competitive than Costco right now but it still needs some work. And they have a long way to go to get the sales volume that Costco has but for now it's an easier in and out on a Saturday.

I would give consideration to shopping at Sam's Club if it was an option, but they never had a strong presence in the Northwest. I do like Costco, but have noticed some inconsistencies in what they stock, and am not impressed with their implementation of self-checkout. Quality of some of the non-national brands is hit-or-miss and there have been times where I wish there was a national brand to choose from. The Kirkland Signature house brand I have generally been satisfied with, but other items I avoid, a good example is the Feit Electric brand of light bulbs (the only one Costco carries), which I have purchased elsewhere in the past and have had bad luck with. They did carry Sylvania in the past.

[arizonaguy]

Living in the Pacific NW, I no longer get to see much of Sam's but I was recently in Salt Lake City and went to both the "world's largest" Costco and the Sam's just a block or so away. The Costco was packed with most registers running. Went to Sam's, they had one staffed register and self-checkout. Neither had a long line.

As I walked around I found the prices to be competitive, even lower on some items than Costco. Some of the hardware and pet products were a good deal. I felt the food selection was on par with Costco with one exception. Sam's seemed to only have national brands. Costco does a pretty good job of bringing in national and smaller brands that are purchased through regional buyers to round out the selection. That's a bit of a miss.

The place where Sam's needs work is on what I call the center of the club store. Comparing to Costco, the furniture was subpar for the price. Some of the seasonal items seems junky. These products are front and center, and thus are really visible.

After my visit, I did have a higher impression of Sam's than I did before. I think they are more price competitive than Costco right now but it still needs some work. And they have a long way to go to get the sales volume that Costco has but for now it's an easier in and out on a Saturday.

That easier in and out combined with a more convenient location is why I've been going to Sam's for many years, despite knowing it was an inferior store to Costco.

I think the regional food brand thing varies a little bit with Sam's. The Reno Sam's- I have the same impression as you- they sell basically the biggest national brands only (and some private label) but regional brands or semi-regional brands are not present. However in some CA Sam's I see a lot better effort on regional brands as well as ethnic foods (see those even at Costco in Reno though, and Sam's definitely has the space to have more stuff).

I also think the Sam's remodels are drastically improving their perishable food program. At this point their produce variety is far better than Costco, and I can only think of one time in the past couple years I took something back for a refund due to a quality issue. They also seem to have more prepared/ready to eat food, some of that has been very good.

I don't think Sam's does great on impulse buy/seasonal type items. Furniture other than basic stuff like a bed frame is a hard pass at Sam's. I've had some clothing purchases that I was happy with (all were clearance though). I also think Sam's does a better job than Costco on the "kitchen electrics" category and hard home category in general. They may just present the items better.

Overall, I think Sam's Club has been steadily improving over the past 5 years while Costco has been steadily declining so the two stores are closer in quality to one another than had been true in the past.

I've been to both Costco and Sam's Club over the past week so I'll try my best to list my observations here:

Advantages of Sam's Club:

- Technology. Scan and Go is one of the best retail applications anywhere (no silly handheld scanners, no need to scan a QR code at a self checkout). It literally is just scan and go (with a receipt check). At least in Arizona you can even purchase alcohol with Scan and Go (just need to show ID to the receipt checker). Costco's website / technology seems to be stuck in the early 2000s.

- Food Court. Sam's has more choices and I think quality is fairly comparable. Costco really killed its food court during the beginning of the pandemic and never really restored it. I do very much enjoy Costco's smoothies though.

- Store Pickup. Sam's has it, Costco doesn't.

- Online Photo Center. Sam's has it, Costco is killing theirs tomorrow.

- Overall selection. Sam's has many more SKUs than Costco so the overall selection of items in most categories is greater. Costco seems to focus on selling large quantities of as few SKUs as possible.

- Sam's also doesn't reset its store every few weeks and keeps items, more or less, in the same spot unless the entire store is remodeled. Costco LOVES to switch things up weekly so that every time I shop there items have been moved around.

Similarities:

- I've found both the Member's Mark and Kirkland Signature private labels to overall be good, quality offerings.

Advantages of Costco:

- Unique items. Costco is like a warehouse sized Trader Joe's with a number of unique, seasonal items that are here one day and gone the next. Costco, like has already been mentioned, also seems to have a much more regionalized (or even individualized by store) selection of merchandise. Costco has a "treasure hunt" whereas Sam's Club simply has larger sizes of typical supermarket / discount store items.

- Deals. In certain categories with certain items Costco has dirt cheap options that Sam's cannot compete with.

Honestly, if I didn't have the Costco credit card I would cancel my membership there. They used to be amazing pre-pandemic but really are simply "coasting" along nowadays.