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

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

Post by ClownLoach »

arizonaguy wrote: April 27th, 2022, 4:00 pm
buckguy wrote: April 27th, 2022, 3:04 pm Costco has surprising gaps in their coverage, so they have room to grow. Next year, they're opening their first store in the Buffalo area, which could support more than one store. They only have a few stores in the Philly area--they have better representation around Pittsburgh which is a much smaller and less affluent metro area. They have stores in Connecticut but none in the New Haven area.

Costco has been able to identify opportunities to open stores in built up areas---they have locations in the DC area, one in a mall that had a dead wing, another near new the Amazon 2nd HQ that normally would be viewed as challenging to locate such a large store. They found a location not far from one of the Walmart that's closing outside of Cleveland, which needed more creativity than Walmart's and opened around the same time. The DC Costco has been very successful, despite being not too far from a suburban store--it used to be easy to shop on weekdays, but not anymore. Costco also has the advantage of not being tied to another business and one with a tarnished reputation.
Costco's problem (and Sam's too) is that their largest customer base seems to be those in the Generation X and Boomer generations. That customer base will be shrinking over the next few decades.

A lot of younger generations do not shop at Costco anymore other than when they are with their parents. I've noticed that Sam's Club has a lot more younger families shopping there versus Costco the last few times I've been there (although I'd imagine a lot of the younger families are on the membership deals that Sam's club sends out in the mail).

Younger generations (millennial and younger) love online shopping and aps. Costco's online shopping / app experience is bad (and that's putting it nicely). Costco's website / app is designed to get customers into the store. Younger people do not want to shop inside the store.

The Sam's Club / Walmart relationship presents some issues if they were to ever separate. Sam's Club probably gets better deals from vendors by being a subsidiary of Walmart. However, as Sam's Club isn't Walmart's core business it also gets the least amount of capital spending of any Walmart entity. If Walmart was to somehow spin off / sell Sam's Club, Sam's Club's costs would rise causing higher pricing and probably making the chain less competitive with Costco.

If Walmart starts building new stores again, we might see a new Sam's Club here or there. However, it's very clear that Walmart and Wall Street seem to want to focus almost all capital expenditures on online shopping over the near term.
I would disagree about limited CapEx at Sam's Club, and Walmart in general. Nearly every Sam's store in my area has been completely refreshed or remodeled in the last few years, with one store relocated to a new building as recently as 2015 (Fullerton, CA). They are currently in process of completing the project of rebranding across most of SoCal which is entailing a completely new layout with seasonal (and snack product) center store, expanded electronics set, complete signage and repaint refresh, new customer service area, expanding fresh departments including new walk ins for produce and dairy, and new exterior repainting and signage. The stores are for all intents and purposes being completely remodeled in this initiative and the finished product is the best looking and most consistent format Sam's has ever rolled out. It really looks light years from Walmart. I could actually imagine someday where Walmart converts some stores to the Sam's Club format. Sam's seems to be able to operate in some lower end areas without the shrink problems since they have the same limited hours of Costco - actually they close even earlier at 8pm now.

I do believe that they could be separated someday however the challenge is that Sam's is using the Walmart distribution system. But many retailers are moving towards 3rd party logistics due to the flexibility it provides and I'm sure that Walmart would not mind signing a 99 year contract or something similar to continue to provide such service.

Walmart is fully remodeling 1200 stores this year to some version of their new "airport" prototype; however I would say that it has not been fully executed in remodels of older low ceiling, smaller stores. It looks amazing for Walmart in a new building (Lake Elsinore, CA) and seems to pack a smaller store with more SKUs, somewhat the opposite of when Target reduced their assortment so drastically to introduce the P-fresh grocery setup. It's like Walmart is reversing the reductions from when they made similar reductions in the past.
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Re: Sam's Club to focus Member's Mark on sustainability

Post by ClownLoach »

Also jumping on the comment about families and Sam's Club - they are very good about having variety in sizes. For example they have the regular "club size" meat packs but also some half size packs plus more cuts of beef than Costco such as Porterhouse, Tomahawk ribeye, etc. The half size packs make it possible for smaller families to shop. They also don't seem to be afraid to remove problematic areas, for example some stores had a kiosk set up with a large perfume and jewelry area that really seemed out of place. This has been yanked out of most stores here as fancy perfumes are out of favor. They will test the market for ethnic foods and add/subtract as needed. I was told that the Store Manager is expected to adjust the assessment as needed and has the ability to order from a internal catalog of thousands of SKUs; they are also still able to bring in local vendors if they can prove the sales. Costco is very limited in their ability to adjust at the store level; they are more bureaucratic and everything goes through the corporate office. Ironically - you would think that Costco and Sam's operate in the opposite way with Sam's being part of Walmart.
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Re: Sam's Club to focus Member's Mark on sustainability

Post by storewanderer »

Sam's has had to be more flexible to survive. Despite being a part of Wal Mart, the culture of Sam's is very different from the culture of Wal Mart.

With the way Sam's has been throwing around free/discounted memberships which I think has seriously helped open them up to folks who would not have considered them, I'm waiting for them to just eliminate the basic membership entirely and let anyone in the store to shop. They can still keep the plus level, etc. with the benefits.

Those smaller sizes of meat at Sam's started back when there were product shortages. It was a way to try to stay in stock on meat for longer. Customer feedback was so positive, they listened, and the idea stuck.

I've ordered a number of items via Sam's website that are not sold in the local store for very nominal shipping fees ($2, etc.). I have noticed these come out of stores in a surrounding state in most cases.
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Re: Sam's Club to focus Member's Mark on sustainability

Post by Romr123 »

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

Post by ClownLoach »

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).
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 BillyGr »

ClownLoach wrote: May 6th, 2022, 12:06 pm 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?
They seem similarly sized to Sam's (we don't have Costco here yet, but they are trying).

About half and half with BJ's (half is food type items and the other half non foods - both things like pet, cleaning, HABA and a selection of household, electronics and even some auto - facilities to install things like tires as well).
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Re: Sam's Club to focus Member's Mark on sustainability

Post by Alpha8472 »

BJ's opened up a market concept on May 6 in a 43,000 square foot former glass front Toys R Us. It is half the size of a full size BJ's store.

The store will have the same pack sizes and pricing. Existing members will have access to this store and new members will have access to the other stores.
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Re: Sam's Club to focus Member's Mark on sustainability

Post by klkla »

Alpha8472 wrote: May 8th, 2022, 5:01 pm BJ's opened up a market concept on May 6 in a 43,000 square foot former glass front Toys R Us. It is half the size of a full size BJ's store.

The store will have the same pack sizes and pricing. Existing members will have access to this store and new members will have access to the other stores.
There's an article here about it:
https://www.supermarketnews.com/retail- ... make-debut
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Re: Sam's Club to focus Member's Mark on sustainability

Post by arizonaguy »

klkla wrote: May 8th, 2022, 6:11 pm
Alpha8472 wrote: May 8th, 2022, 5:01 pm BJ's opened up a market concept on May 6 in a 43,000 square foot former glass front Toys R Us. It is half the size of a full size BJ's store.

The store will have the same pack sizes and pricing. Existing members will have access to this store and new members will have access to the other stores.
There's an article here about it:
https://www.supermarketnews.com/retail- ... make-debut
Sam's Club actually has a very similar concept store in what appears to have been at one time a marina Safeway per the photos:

https://www.google.com/maps/uv?pb=!1s0x ... ip6BAhgEAM

https://corporate.samsclub.com/blog/201 ... -of-retail
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Re: Sam's Club to focus Member's Mark on sustainability

Post by babs »

arizonaguy wrote: May 8th, 2022, 8:00 pm
klkla wrote: May 8th, 2022, 6:11 pm
Alpha8472 wrote: May 8th, 2022, 5:01 pm BJ's opened up a market concept on May 6 in a 43,000 square foot former glass front Toys R Us. It is half the size of a full size BJ's store.

The store will have the same pack sizes and pricing. Existing members will have access to this store and new members will have access to the other stores.
There's an article here about it:
https://www.supermarketnews.com/retail- ... make-debut
Sam's Club actually has a very similar concept store in what appears to have been at one time a marina Safeway per the photos:

https://www.google.com/maps/uv?pb=!1s0x ... ip6BAhgEAM

https://corporate.samsclub.com/blog/201 ... -of-retail
A number of years ago Costco planned a similar store in Bellevue called Costco Fresh. They killed the idea after realizing that it was distracting from their core operation it was better to focus on the core store. Probably a smart move.
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