A division of Wal-Mart Stores since 1983, Sam's Club accounts for 12% of Wal-Mart's sales. It runs about 610 locations in 47 US states, plus another 165-plus stores in Brazil, China, Mexico, and Puerto Rico. Sam's Club charges its small business and individual members in the US annual fees that range from $35 to $100. The warehouse club stores average 134,000 square feet and offer more than 4,000 discounted items, including bulk office supplies and food, electronic goods, jewelry, clothes, insurance and travel services, and Member's Mark store-brand products. Samsclub.com is the company's online incarnation.
Under the leadership of Brian Cornell, a former CEO of Michaels Stores and a Safeway executive, Sam's Club has turned its business around after a rough patch during which there was speculation that it might be spun off. In fiscal 2012 (ends January) the warehouse club operator rang up sales of $53.8 billion, up from $49.5 billion in the previous year, a nearly 9% jump in sales. Indeed, Sam's Club has outperformed Wal-Mart's US stores in terms of both same-store sales and overall sales growth in recent years.
The improved performance of Sam's Club relative to the Wal-Mart in the US is due to both trouble at its larger counterpart and a pick up in its own business. Cornell is working to sign up more members and get current members to buy more. In particular, Sam's Club would like to sell more food, much like Costco does now. But while Sam's Club tries to play catch up with Costco, it must also keep an eye on its smaller rival BJ's Wholesale Club. BJ's recently went private, a move that might help it extend its market beyond the East Coast. Sam's Club's own growth plans included the opening of three new US stores in fiscal 2012, followed by an acceleration in openings in future years. Overseas, Sam's is looking to China for growth. It currently operates about half a dozen wholesale clubs there and could ultimately have 40 to 50.
Catering to its small business members, Sam's Club has beefed up its business services offerings to include auto loans, group health insurance and discounts on health care services, payroll services, tax advice, and Web site services, some for an added fee. The company has also launched a new office products catalog (online and hardcopy) to members. Its Gold Key program allows business members to shop starting at 7 am, before regular operating hours. Sam's has also begun testing TV and home theater installation services in selected stores. Many of its electronics competitors, including Best Buy, also offer installation services. Catering to a different need, the company recently launched its own brand of French vodka under the Rue 33 label. – less