Sam's Club to add 15 stores per year in plan to double sales
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Sam's Club plans to open 15 new locations per year 'for the foreseeable future' and intends to remodel all of its approximately 600 existing locations, the Walmart-owned club retailer's top executive said during an investment community meeting on Wednesday.
The chain also expects to double its membership, sales and profits over the next eight to 10 years, in part because of strong growth in its e-commerce operations, Sam's Club CEO Chris Nicholas added.
Sam's Club 'has been on a journey to transform our business model, to deliver a retail experience that is free of friction and frustration, one that elevates the member's life by anticipating what they need and giving them more than they expected. And this starts with investing in our physical footprint,' Nicholas said.
He also said that the company is confident 'in the returns we will see in sales and in membership income' by remodeling Sam's Club's entire fleet.
Nicholas, as well as Todd Sears, CFO of Sam's Club, said during the event that the chain believes its efforts to remodel its locations, add new stores and build its online presence will fuel its growth during the coming decade. Sears noted that half of the company's members either shop online or use its Scan & Go technology when making purchases in physical locations, adding that around 40% of the transactions Sam's Club records are digital.
Shoppers who use Sam's Club's online tools shop three times more frequently than customers who only make purchases in physical locations, according to Tom Ward, Sam's Club's end-to-end chief operating officer.
Omnichannel shoppers also buy products from twice as many categories and spend three times as much as other customers, Ward said. They also renew their memberships at a 10% higher rate than other Sam's Club shoppers, he added.
Between 80% and 90% of Sam's Club's profits come from membership fees, according to Sears.
Sam's Club is eyeing growth as its chief rivals in the club retail sector also expand. BJ's Wholesale Club plans to add between 25 and 30 new locations over the next two fiscal years, the chain announced in March. Meanwhile, Costco expects to open more than two dozen new locations this year, President and CEO Ron Vachris said during an earnings call last month. Vachris did not specify how many of Costco's new warehouses will be in the U.S.
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