Sam’s Club to open 30-plus new U.S. stores, five distribution/fulfillment centers
Sam’s Club is embarking on its most aggressive expansion in years.
The Walmart Inc.-owned membership warehouse club retailer plans to open more than 30 new clubs across the United States during the next several years. The first location, which is planned for Florida, is slated to open in 2024. The company is also expanding its fulfillment and distribution center network.
Sam’s Club, which operates approximately 600 stores in the U.S., including Puerto Rico, has not opened a new club in years. It closed 63 locations across the country in 2018, converting up to 12 of the shuttered locations to fulfillment centers in a move designed to speed delivery of online orders.
The new Sam’s Clubs will be approximately 160,000 sq.-ft., which is about 20,000 sq. ft. larger than most current locations. The extra space will allow for significant expansion in stores’ omni-fulfillment footprint, with a dedicated space for curbside pickup, delivery to home and ship-from-club orders. The area will include walk-in coolers and expanded doors for outgoing delivery truck efficiency.
Most of the new stores will feature a seafood/sushi island, full-service floral, walk-in dairy, fresh coolers. Many will also include fuel stations and liquor offerings.
The new clubs will also boast a larger healthcare space, with a patient waiting area, health services suites, private consultation rooms and dedicated hearing and optical centers.
Sustainability will play a prominent role in Sam’s new locations. The company is designing future clubs with zero-emission strategies built in through electrification of equipment, including electric ovens, HVAC equipment, water heating systems, and low-emissions refrigeration systems. It also is committed to installing energy-efficient LED lighting, electric vehicle charging stations for delivery vehicles and new "green" refrigerant in its new locations.
Sam’s Club said the decision to expand its physical footprint was motivated by historic comparable sales growth and a record rise in membership during the past two years as it “continued to prioritize products and services that drive shopping trips and demonstrate the value of membership.”
In recent years, the retailer has invested significantly in its physical footprint, enhancing member experiences with improved service desks and redesigning the majority of its 600 clubs to make them brighter, easier to navigate and more functional. It has also made big investments in technology to improve its omnichannel shopping experience.
Sam’s Club has enjoyed same-store sales gains (excluding fuel costs) for over a year. In Walmart’s most recent quarter, which ended in late October, Sam’s same-store sales increased 10% and its membership income rose 8%.
“We've seen remarkable growth over the past few years with a record number of members, and we're excited to bring the experience of Sam’s Club to even more markets as we expand our footprint,” said Kathryn McLay, CEO, Sam's Club.
Supply Chain Enhancement
In addition to opening new clubs, the company has launched a multiple-year plan to invest in and modernize its supply chain through new distribution and fulfillment center locations across the country, including cutting-edge automation. Sam's Club will launch five new supply chain fulfillment and distribution centers in 2023, with the first location planned in Georgia in the third quarter.
"We have an opportunity to place ourselves on the cutting edge of efficiency and automation, unique to our business model," said Joseph Godsey, senior VP of supply chain at Sam's Club.
To support its growth during the past few years, Sam’s Club has undertaken a significant transformation of its supply chain, evolving network and end-to-end capabilities. Over the next several years, Sam's Club will add numerous new facilities to its supply chain network as well as retrofitting a number of existing facilities for more enhanced physical and digital capabilities.
With the new investment, Sam’s Club stores and members will become significantly closer on average to a supply chain facility, the company said. As part of these new footprints, Sam's Club is launching highly automated facilities with state-of-the-art automation and robotics.
“By combining the shorter distances and the efficiencies added via process, automation and digitization, replenishment of clubs and item fulfillment for members will be best in class,” the company stated.