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

This is the place for general and miscellaneous posts on topics which might extend past the boundaries of any specific region. No non-grocery posts.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

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

Post by storewanderer »

One thing I wonder is how the logistics for Sam's Club in Boise work. I assume it is on whatever logistics stream Utah and Colorado are on. There is also a Sam's Club in Great Falls, MT, again, wonder how that is supplied.

My guess is most of these new Sam's Clubs will be in AZ, FL, and TX.

I also expect Costco to do some expansions to react to this. They've basically had no contest for years in most of the US as far as expansion goes and that has worked very well for them.
ClownLoach
Valued Contributor
Valued Contributor
Posts: 2689
Joined: April 4th, 2016, 10:55 pm
Has thanked: 39 times
Been thanked: 288 times
Status: Offline

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

Post by ClownLoach »

storewanderer wrote: January 27th, 2023, 11:50 am
babs wrote: January 27th, 2023, 10:15 am 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.
Sam's is in a multi year effort to make their brand as large as Kirkland is for Costco. What I have noticed is that they are absolutely copying the treasure hunt aspect of Costco but they are using a lot of social media influencers to promote it. For example they basically cloned a popular big gold filagree mirror that a expensive design store sells for a couple thousand dollars and theirs is $149, they get a pallet in randomly and they fly out the door. People are checking their app to see if it's in stock and lined up at the door when they are. (no way this is resellers because it's just too large for anyone to ship)

They completely are relaunching their furniture and seasonal businesses and this year's patio sets are highly fashionable, far better price and quality than Costco. Couches and other items are arriving too and much better looking than before. Costco recycles the same exact items twice a year with maybe a color change but this Sam's product is completely new. I thought Sam's Christmas product was mixed, didn't like the decor but they had the best deal anywhere on rolls of icicle type micro LED lights and I decorated my whole house with them.

What Sam's is doing behind the scenes is they have created a group of about 20K of their best members and they send them surveys and even samples to review their Members Mark products. Admittedly I got invited and they ask many detailed questions. I was surveyed about the liquor category which I felt Sam's was lower end than Costco last year; I noticed recently they have revamped the department and more than doubled their "fancy" bottle section with some pretty good stuff. (I don't expect Sam's to bring in a $19,000 bottle of scotch like they have sitting in a glass case in Murrieta, but let's face it Costco probably isn't going to sell that anytime soon either). So they clearly know their problem areas internally and they are laser focused on improving them with customer direct input driving the changes.

They have some outstanding quality gardening product last fall and even now that Costco quit carrying in SoCal like flower bulbs. (I did see bulbs in Seattle last fall but was disappointed they didn't bring into SoCal - now Costco has a bunch of bareroot plants that won't grow in our climate here). It seems like Sam's is getting better at the regional product, while outside of foods Costco has really gone backwards with the same kinds of clothing and other stuff in every market. They had lots of Pacific Northwest style plaid flannel on clearance in SoCal until the cold snap. Hopefully they still get great stuff in Hawaii...

As far as new locations go, I would expect to see them focus entirely on newer areas that are lacking in their network of stores. I saw Arizona, Florida, Texas mentioned but remember Sam's is all over those states anyway. I would bet not a single new Sam's opens next to a Walmart as that strategy seems to be dead. I do wonder if we will see some Walmart closures where the store gets torn down and rebuilt as a Sam's? I think if Walmart hadn't made the mistake of building so many stores with low rooflines that are incompatible with high pile pallet storage they would more aggressively convert to the Sam's format. I am not sure if they can stomach the PNW where Costco is pretty much willing to double their store count in a region like around Vancouver WA even if they cannibalize themselves and net only a few percentage points of total sales increase. They are very dominant there. But I would expect to see them try to get back into San Diego where they only have one store and it is very busy these days.

I would imagine that they must be looking at the fact that certain markets like Seattle and Portland and San Diego are becoming so landlocked with developments that if they don't make a play to get in before all the suitable space is gone they will never have a chance to open up in a meaningful way again. I don't see them opening any stores that cannibalize existing locations and just fill in a market unless they want to fight for a site to keep Costco out.

Costco isn't going to take it easy either. I saw an article where Costco is working on a site in South LA where they would build a two story location with multi level basement parking under a high rise apartment complex. It will go on only 5 acres which is crazy small, there are probably Rite Aid stores that sit on a larger lot. But if this works for Costco I'm sure Sam's could clone it quick.

https://www.costar.com/article/89947224 ... rs-buzzing
Alpha8472
Posts: 3929
Joined: February 24th, 2009, 8:55 pm
Been thanked: 79 times
Status: Offline

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

Post by Alpha8472 »

I know of several Walmart stores in the San Francisco Bay Area that are suffering as Walmart stores. If they were to convert to Sam's Club, that would be a much better fit. People love the Costco style warehouse stores. Business as a Sam's Club would go up drastically compared to a Walmart. There is no shortage of customers that want to shop at a warehouse store.

Shoplifting is a problem at Walmart, but at a Sam's Club if there is a single entrance and exit, they could control the shoplifting much better.
ClownLoach
Valued Contributor
Valued Contributor
Posts: 2689
Joined: April 4th, 2016, 10:55 pm
Has thanked: 39 times
Been thanked: 288 times
Status: Offline

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

Post by ClownLoach »

Alpha8472 wrote: January 28th, 2023, 2:03 pm I know of several Walmart stores in the San Francisco Bay Area that are suffering as Walmart stores. If they were to convert to Sam's Club, that would be a much better fit. People love the Costco style warehouse stores. Business as a Sam's Club would go up drastically compared to a Walmart. There is no shortage of customers that want to shop at a warehouse store.

Shoplifting is a problem at Walmart, but at a Sam's Club if there is a single entrance and exit, they could control the shoplifting much better.
I was surprised to see that their paid membership is at an all time high as well. I'm not noticing as many promotional discounts or free membership deals, and they have now put systems in place to prevent freeloaders from letting it lapse then get a new promotion. Those freeloaders probably were their least profitable customers and they probably would never pay to renew so now they are not part of the equation. I think they knew they were selling an inferior product in the past, but the reinvestment in the chainwide remodels, great technology like Scan and Go, and new assortment has brought value back to the membership. You get your money's worth now at full price and they actually were confident enough in their offering to raise the price recently.

Just for fun I compared the quality of Members Mark paper products (paper towel and tp) to Kirkland Signature - there is no contest. The Members Mark products are higher quality and also larger package (look at the square feet or sheet count). They keep doing surveys about their Members Mark laundry detergent which I haven't tried (I only use Tide) but I might get a bottle to see how it compares. They are laser focused on the quality of the house brands, unlike Walmart who seeks to want to make the worst stuff imaginable as "Great Value."

Sam's has stated they will be building a larger format warehouse than most of their chain going forward - at 160K square feet they are actually putting up larger boxes than Costco does today (their newest prototypes are 151K like the new Murrieta store, they merge together pharmacy, optical and hearing aids to create a health care corner for example; subtle changes elsewhere). If there is room for this on these Bay area Walmart sites it would be advantageous to tear them down and build a new Sam's because the obstacle of membership greatly reduces shoplifting.
Alpha8472
Posts: 3929
Joined: February 24th, 2009, 8:55 pm
Been thanked: 79 times
Status: Offline

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

Post by Alpha8472 »

There are several Bay Area Walmarts that used to be Costco stores. They have huge tall ceilings and originally had auto centers. These could be easily converted to Sam's Club stores.
BatteryMill
Shift Manager
Shift Manager
Posts: 411
Joined: May 1st, 2016, 12:25 pm
Has thanked: 8 times
Been thanked: 18 times
Contact:
Status: Offline

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

Post by BatteryMill »

I wonder if some of the closed Sam's might reopen as part of this. Some short-lived locations in that bunch...
veteran+
Valued Contributor
Valued Contributor
Posts: 2233
Joined: January 3rd, 2015, 7:53 am
Has thanked: 1202 times
Been thanked: 71 times
Status: Offline

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

Post by veteran+ »

Alpha8472 wrote: January 28th, 2023, 2:03 pm I know of several Walmart stores in the San Francisco Bay Area that are suffering as Walmart stores. If they were to convert to Sam's Club, that would be a much better fit. People love the Costco style warehouse stores. Business as a Sam's Club would go up drastically compared to a Walmart. There is no shortage of customers that want to shop at a warehouse store.

Shoplifting is a problem at Walmart, but at a Sam's Club if there is a single entrance and exit, they could control the shoplifting much better.
I guess I must be an outlier because I do not like warehouse stores and I refuse to pay a membership fee to SHOP at any store.

🤷
arizonaguy
Store Manager
Store Manager
Posts: 1107
Joined: July 12th, 2013, 6:07 pm
Been thanked: 35 times
Status: Offline

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

Post by arizonaguy »

I know Arizona has been mentioned a lot but Sam's has been contracting in Arizona for years.

Since 2010 they have closed 5 stores without replacement.

2010:

2005 E Indian School Rd. Phoenix (this store is now the HQ / Distribution Center for Leslie's Pool Supplies)

2018:

2425 E Florence Blvd, Casa Grande (abandoned, this store was in a really bad retail area where a multiple big boxes across the street had already closed before this store opened (Target closed in 2012 and this opened in 2014), I don't know what Sam's was thinking here)

5757 E State Route 69, Prescott Valley (now CAL Ranch)

1375 S Arizona Ave, Chandler (now an Airstream sales location)

15255 N Northsight Blvd, Scottsdale (now an At Home)

They also had a short lived store in the 1990s (that I believe was a former PACE Membership Warehouse) at 317 S. 48th St. in Phoenix which became a go kart track for a while and has now been expanded into an industrial / warehouse. Per aerial photos it closed around 1997 or 1998 and was in an awful location for retail next to Sky Harbor Airport and a bunch of industrial type buildings.

I don't see them reopening the Casa Grande location (even though it opened in 2014 and is less than 10 years old at present).

They were supposed to open a club in Tempe at the Tempe Marketplace development around 2006/2007 (that would've been an indirect replacement for that 48th St. Location. Tempe Marketplace would be the perfect location for them to enter into as there aren't any Costco's close by and there has been a lot of infill development nearby. This location also has good freeway access. I don't know what the status of this property is but there is still a dirt lot in the parking lot of Tempe Marketplace that is the exact shape of a Sam's Club: https://goo.gl/maps/3eqxaXUZAe9sGctKA

Phoenix is the rare SunBelt metro area where Costco is absolutely dominant. Costco opened a new store in Santan Valley last week and already has plans for another new store in Buckeye. The density of Costco's in the Phoenix area is probably only rivaled by Los Angeles, Seattle and San Diego (I believe there are 15 in Metro Phoenix right now with a 16th on the way, not including the Business Center which would make it 17).

As far as potential sites for new stores, I think they're a bit limited. I really do think that they should build on that Tempe Marketplace site if they can (as I've said before they have a dirt lot in the parking lot where the fuel center as well as the main store were supposed to go). They also need to figure out how to serve Scottsdale / Paradise Valley. Their former Scottsdale store was in what theoretically should have been a good location (across the street from the highest performing Costco in the metro area). However it shared a parking lot with a Walmart and they were never able to compete with Costco there for some reason. If they don't end up building in Tempe a site further south along Loop 101 might make sense (potentially next to the Walmart at Chaparral / Loop 101). I know they're not targeting the same customer base as Walmart but that Walmart site would be the ideal site to serve Scottsdale / N Tempe (if they don't build at Tempe Marketplace).

There was also a proposed 2nd Tucson location at I-19 / Irvington that was killed while in the planning stages. This site wouldn't be great for Sam's new focus. They'd be better off with a location somewhere on Tucson's east side.
User avatar
retailfanmitchell019
Assistant Store Manager
Assistant Store Manager
Posts: 891
Joined: November 10th, 2019, 11:17 am
Location: 760 area code
Has thanked: 39 times
Been thanked: 57 times
Contact:
Status: Offline

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

Post by retailfanmitchell019 »

storewanderer wrote: January 26th, 2023, 11:48 pm 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.
I could see Sam's being spun out into an IPO. Sam's already operates somewhat autonomous from Walmart (separate store brands).
ClownLoach
Valued Contributor
Valued Contributor
Posts: 2689
Joined: April 4th, 2016, 10:55 pm
Has thanked: 39 times
Been thanked: 288 times
Status: Offline

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

Post by ClownLoach »

retailfanmitchell019 wrote: January 29th, 2023, 2:37 pm
storewanderer wrote: January 26th, 2023, 11:48 pm 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.
I could see Sam's being spun out into an IPO. Sam's already operates somewhat autonomous from Walmart (separate store brands).
I disagree and believe is is nearly impossible to separate the two. Sam's basically gets their corporate and IT overhead paid by Walmart. DCs are fixed costs aside from labor, so the ideal is for a DC to run at 100% capacity 24/7 because you don't save anything but labor running less. Sam's does need some dedicated regional distribution but what keeps them going is the fact that Walmart has hundreds of DCs which cut transportation costs to nothing. I do not believe that they could afford to pay Walmart for the service of using their IT infrastructure and other corporate overhead plus spend a fortune building their own separate DC network. Sam's services more small markets than Costco because of that Walmart DC network that gets product close to their stores. I just do not see any way they could operate with their own full overhead independently without significantly increasing their pricing which in turn would bury them. Plus they serve as the IT testing ground for Walmart and they wouldn't want to give that up either. It's a synergistic relationship.

This same issue is why I question the ability of Kroger and Albertsons to create the alleged SpinCo unless it exclusively contains one company's stores. The system integration costs alone will sink SpinCo like an anchor on a short chain unless they are forced to provide IT services for a decade or so.
Post Reply