Sam’s Club details super-sized growth plans

Record same-store sales growth and membership numbers are driving super-sized expansion plans for Walmart-owned Sam’s Club, the warehouse retailer announced Thursday.

Bentonville, Arkansas-based Sam’s Club said it plans to open more than 30 new warehouses across the U.S. over the next several years, with the first slated to debut in Florida next year. The new stores will be about 160,000 square feet, about 20,000-square-feet larger than most current clubs, the retailer said.

In addition, the membership-based retailer said it is embarking on a multi-year plan to “invest in and modernize its supply chain” through new, high-tech distribution and fulfilment center locations around the country. Sam’s Club said it will open five new supply-chain fulfillment and distribution centers this year alone, with the first one planned for Georgia during the third quarter.

“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,” Sam’s Club CEO Kathryn McLay said in a statement. “And as we open new clubs in new locations, we’ll continue to innovate so that our members shop and save, whether in-person or online.”

With the larger footprint, most of the new Sam’s Club locations will feature an expanded area for curbside pickup, home delivery and ship-from-club orders, with walk-in coolers and expanded doors for outgoing delivery efficiency, Sam’s Club said. The larger stores will also include a seafood-sushi “island,” full-service floral, as well as walk-in dairy and fresh coolers. Most of the stores will have a larger healthcare space, with patient waiting areas, health service suites, private consultation rooms, and hearing and optical centers. Many of the new warehouses will also include fuel stations and liquor departments.

Sam’s Club investment in fulfillment facilities means that the warehouses will become “significantly closer, on average” to a supply chain facility, the company said, noting that it plans to add “numerous new facilities” while also retrofitting existing centers for enhanced physical and digital capabilities.

The fulfillment facilities will be powered by “state-of-the-art automation and robotics,” the company said.

“We have an opportunity to place ourselves on the cutting edge of efficiency and automation, unique to our business model,” Joseph Godsey, Sam’s Club’s SVP of supply chain, said in a statement.

Future warehouse clubs will be built with sustainability in mind, Sam’s Club said. They’ll be built with zero-emission strategies that include electrification of equipment, including ovens, HVAC and water heating systems, as well as low-emissions refrigeration systems. The company plans to install LED lighting and EV charging stations for delivery vehicles.

“During times like inflation, times when people have pressure on their household budget, it’s a time when Sam’s Club can really show up,” McLay said in a CNBC interview Thursday. “So, I think the time is really right for us.”

McLay told the network that new store growth will be focused in fast-growing suburban areas, which currently have a limited Sam’s Club presence.

Sam’s Club, which debuted in 1983 in Midwest City, Oklahoma, currently operates nearly 600 stores across the U.S. But the retailer hasn’t opened a new location since 2017 and it shut down more than 60 warehouse clubs around the country in 2018, saying it wanted to “better align our locations with our strategy.”

Warehouse clubs have seen a surge in consumer interest as shoppers look for deals on groceries and other items amid soaring inflation.

In October, Sam’s Club raised its membership fees for the first time in nearly a decade, moving from $45 to $50 for Club-level members and $100 to $110 for Plus-level members. The retailer has continued to see record membership growth.

“Sam’s Club has posted 11 consecutive quarters of double-digit comp growth with strong contributions from both transactions and ticket,” investment firm Jeffries said in a report Thursday. “The company has been laser-focused on retaining new members, which tend to be younger and more tech-savvy.”