Sustainably Sam’s New Club Goes Green
FAYETTEVILLE, ARK. —Wal-Mart continues to take the issue of sustainability seriously as a means to improve operations while protecting the environment, and the latest evidence of this can be found at a new Sam’s Club a short drive south of its headquarters.
Located along the east side of I-540 in Fayetteville, the new club is a model of sustainability for Sam’s Club the way Wal-Mart prototype stores in McKinney, Texas, and Aurora, Colo., are for the parent company. Among the key sustainability measures at the new Sam’s Club are 200 skylights, motion sensor activated LED lights in frozen and refrigerated cases and the ability to compost organic waste. Other measures include a closed loop refrigeration system that reduces the use of refrigerant and requires less copper pipe and numerous water conservation features designed to harvest rainwater, filter runoff and reuse water.
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As Wal-Mart did in its prototype sustainability stores, Sam’s Club wants those who shop at the location to understand how the building is special since sustainability measures aren’t readily visible. As a result, there is a sign near the entrance to the club that calls out special features, and inside additional signs are located throughout the club. A massive sign explaining the building’s green features is also displayed across the front wall of the building so customers will see it while they are checking out.
The opening of the Fayetteville location marks the second time in the past 12 months that Sam’s has opened a club in its home market of Northwest Arkansas. Last September, a new club opened in Bentonville a short distance from Sam’s headquarters, and that unit feature numerous merchandising experiments, most of which were not extended to the new Fayetteville location. The new location in Fayetteville replaces a club that opened 20 years ago in Springdale, which despite upgrades over the years, was showing its age.
The new location showcases Sam’s Club’s current thinking regarding merchandising, which has remained consistent in recent years as the $41.5 billion warehouse club division has experienced management stability. The strategy involves an ongoing emphasis on small business members blended with an increased effort to broaden the appeal of the product offering by infusing the assortment with items that satisfy small business owners’ personal needs.
The most dramatic evidence of the latter can be found near the entrance to the club where Sam’s has emphasized flat-panel televisions. Customers entering the building run into a gauntlet of televisions, with boxed goods along the right side in an area known as the cart rail, while display models are arrayed along the left side. As customers move through this area they encounter one of the club’s more dominant features: a dramatic Sony fixture in the middle of the aisle displaying several large screens to full effect. Moving past this display is yet another display of televisions with Vizio brand stacked on an endcap.
The strategy has paid off for Sam’s in recent years and during the recently ended second quarter, in which Wal-Mart fell short of analysts’ earnings expectations, Sam’s Club was one of the few bright spots. During the second quarter, it grew sales by 8.6% to $11.4 billion from $10.5 billion while same-store sales increased by 5.9%, excluding fuel sales, which are now offered at roughly 70% of clubs. Operating profits increased 11.2% to $447 million from $402 million. Membership revenues increased as more small business owners signed up, gross margins improved and inventories grew at only 4.4% which enabled Sam’s to achieve its goal of growing inventories at half the rate of sales.