Sam’s Club back in expansion mode

Sam’s Club said it is launching its biggest expansion push in years, with plans to open 30 new membership clubs across the U.S.

“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 of Sam's Club, in a statement.

The first new store in the expansion initiative, which is set to unfold over the “next several years,” is planned for Florida in 2024.

The new clubs will be approximately 160,000 square feet, larger than most current locations, which average 134,000 square feet, according to filings with the Securities and Exchange Commission by parent company Walmart.

The company said most new clubs will feature:

• seafood/sushi islands

• full-service floral departments

• walk-in dairy and fresh coolers

• a larger healthcare space, including a patient waiting area, health services suites, private consultation rooms, and dedicated hearing and optical centers.

Many of the new locations will also include fuel stations and liquor offerings.

In addition, the stores will feature a significant expansion in the omnichannel fulfillment footprint, including a dedicated space for curbside pickup, delivery-to-home and ship-from-club orders. This area will include walk-in coolers and expanded doors for outgoing delivery truck efficiency, the company said.

Sam’s Club said it has been investing in improving its stores during the last several years with a redesign that makes them brighter, easier to navigate and more functional. It invested in in-store technologies including Scan & Go Checkout, Scan & Go Fuel, Scan & Ship, Curbside Pickup and others.

Last year it also introduced a new loyalty program called Sam’s Cash that merged its Cash Rewards for Plus members and Cash Back for Sam’s Club Mastercard holders.

SEC filings show that Sam’s Club, a division of Walmart, has added only one net new store in the last five years in the U.S. It currently operates 600 membership clubs in the U.S.

Sam’s Club generated sales of $73.6 billion in fiscal 2022, which ended last January. That represented sales growth of 15.2% over the preceding year.

The chain’s planned growth comes as rivals Costco Wholesale and BJ’s Wholesale are also adding more locations. Costco recently said it plans 15 new U.S. stores this year, and BJ’s said in November it had opened seven new stores as of its third fiscal quarter, with more on the way in the coming months.

In addition to the new membership clubs, Sam’s Club also said it plans to modernize its supply chain with new distribution and fulfillment centers that will include advanced automation and robotics. The company plans to open 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, in a statement.

The company also said it was embarking on its expansion plans with sustainability in mind. It 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. In addition, the company said it is committed to installing energy efficient LED lighting, electric vehicle charging stations for delivery vehicles and new green refrigerant in its new locations.