Sam’s Club to cut costs and focus on essentials

New York City Wal-Mart Stores' Sam's Club will cut prices on specific items, offer more everyday goods like food and health-and-beauty items, and edit its assortment of general merchandise.

Addressing investors on the second of two days of analyst meetings in Roger, Ark., near the company's headquarters in Bentonville, Sam’s Club CEO and president Brian Cornell said he hopes to steal customers from rivals by focusing on fewer but bigger initiatives.

The chain is now testing these changes in a few stores. It says its revamped stores will be less expensive to run and will offer more variety and more brands of items, from take-home meals to baked goods. The new model will have less space for large appliances, sporting goods, furniture and apparel.

In other changes, the revamped stores will require workers to stack merchandise one pallet high instead of two, which makes it easier to restock stores. Sam's Club estimates that such efficiencies can cut worker hours 6% to 8% over the next five years, which will cut the chain's costs.