Here's How Much Sam's Club Customers Buy When They Order Pizza Delivery
Sam's, the warehouse operation run by Walmart (WMT), in May said delivery of its Member's Mark pizzas—a hot 16-inch version costs about $9—would be available nationwide by the end of the month. Members can schedule a window or pay up for "express" delivery within three hours. Those pizza orders are turning into wins for Sam's, Walmart CFO John David Rainey said Tuesday.
"You may hear that and think, 'Gosh, that can't be very economical for you to deliver a pizza to someone from a club,'" Rainey said at a conference, a transcript of which was made available by AlphaSense. "Here's the thing: The average basket size of a pizza delivery is over $100."
Pizza is a competitive business, with entrants coming not only from the kind of places you might think—pizza chains, grocery stores selling frozen and other varieties—but also places like Casey's General Stores (CASY), which is currently promoting a BBQ brisket variety, and Costco (COST), which sells take-and-bake pies along with slices for snacking shoppers.
For Sam's, which accounted for about 16% of Walmart's U.S. revenue in its last full year, the pies are driving sales of other, non-pizza, goods. (The company is seeing a similar effect with rotisserie chickens, executives have said.)
"Members are taking advantage of the broad assortment that we have, and while we are getting a pizza delivered, providing general merchandise or other items to go along with that, which makes that eCommerce delivery very attractive from an economic perspective for us," Rainey said.
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