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BENTONVILLE, Ark. — This year marks the 40th anniversary of the establishment of Sam’s Club, and this fall Kathryn McLay will observe her fourth anniversary at the helm of the membership warehouse club chain.
Her tenure has witnessed an ongoing resurgence at Sam’s Club, culminating in management’s decision this year to return to expansion mode after several years of nongrowth and retrenchment.
A few numbers illustrate the level of performance that Sam’s Club is achieving. Over the past three years, McLay pointed out to analysts during Walmart’s investment community meeting in February, the chain’s net sales have soared 43% to a record $84 billion in fiscal 2023 (which ended in January). During that period, Sam’s posted 12 consecutive quarters of double-digit comparable sales growth.
In addition, e-commerce continued to grow impressively, with sales for the year up 22%. Even more importantly, the chain’s e-comm business is now profitable.
Kath McLay
Just as impressively, membership has grown nearly 30% over that span — without the benefit of physical expansion. “We’re attracting unprecedented numbers of Millennials and members of Gen Z,” McLay noted. “We’ve added so many members that it’s like we’ve added clubs without building new clubs, and we’ve grown channel share growth without expanding our physical footprint.”
That is about to change. In January the company announced it would open more than 30 new clubs across the country over the next several years, with the first location set to debut next year in Florida. This year Sam’s Club is laying the groundwork for the expansion with plans to open five new supply chain fulfillment and distribution centers.
At 160,000 square feet, the new clubs will be larger than most current facilities, reflecting Sam’s Club’s omnichannel evolution. For example, the new clubs will incorporate dedicated space for curbside pickup and ship-from club and delivery-to-home order fulfillment. The area will include walk-in coolers and expanded doors for efficient loading of outgoing delivery trucks.
Over the past several years, Sam’s Club has remodeled most of its nearly 600 locations to make them easier to navigate, brighter and more colorful but also functional. The member experience has been elevated by the evolution of the Scan & Go checkout app, curbside pickup and other omnichannel offerings. More than 1 in 4 members now use Scan & Go.
The new clubs will include such features as seafood/sushi islands, full-service floral departments and walk-in dairy and fresh coolers. In addition, more space will be allocated to health care, including a patient waiting area, health services suites, private consultation rooms and dedicated hearing and optical centers.
As McLay indicated, the new generation of Sam’s Clubs are being designed with its younger members in mind.
“Over the past two years, Millennials and Gen Z have grown the fastest within our member base, increasing at some 65% and 120%, respectively,” she said. “Not only are these cohorts growing but, combined, they have the highest growth rate in sales, are more likely to have joined us organically, and have the highest digital engagement with us, including their use of Scan & Go technology.”
With those member demographics, the future does indeed look bright at Sam’s Club, and McLay’s confidence is understandable: “We are building a strong relationship with our members that they can’t find anywhere else and [we] see a path to being No. 1 in the growing club channel,” she concluded.
