Natural channel grocery shopping chapter 6 the retail

Natural Channel Grocery Shopping
Chapter 6: The Retail Competition
August 2017 © Packaged Facts
181
Sam’s Club
A division of Walmart Stores Inc., Sam’s Club () rang up net sales of
$56.8 billion during the fiscal year ending January 31, 2016, representing approximately
12% of Walmart’s total net sales . As of September 30, 2016, Sam’s C lub operated 655
stores in 47 states and Puerto Rico. Sam’s has reported several times that 55% of its sales
come from grocery and consumables. Although Sam’s Clubs typically don’t have as many
fresh organics displayed in its grocery area, Sam’s Member’s M ark private label brand
boasts a wide selection of natural and organic packaged foods, including coffee, sugar,
spices, and canned goods.
Sam’s has been waging an uphill battle again its primary competitor, Costco, since 2012.
After starting a three-year renovation project for Sam’s in 2009, Walmart ordered
additional changes. Not surprisingly, many of the plans carried out since 2012 have
involved finding ways to better compete with Costco. In a March 2016 article, Forbes
outlined some of these plans, noting that Walmart had settled on four initiatives: opening
new Sam’s in affluent areas, closing underperforming Sam’s, reviewing merchandise
categories, and expanding private labels. Forbes said Walmart plans to open eight to ten
new Sam’s a year in affluen t areas (March 1, 2016).
Additionally, in 2017 Sam’s announced a complete revamp of its Member’s Mark lineup,
which will now feature items ranging from “pure Italian -sourced olive oil to honey from a
bee cooperative” (Sam’s press release, April 19, 2017). Member’s Mark represents $10
billion in sales for the company and is a major focus area for future growth, which includes
the addition of some natural and organic products. As part of the overhaul, the company
formed a dedicated team of product developers, culinary experts, and food scientists to
ensure each item emphasizes quality and value. “In the past we made sure we were
competitive with national brands,” explains Chandra Holt, VP of private brands for Sam’s
Club. “But in today’s environment, a lot of our members want better than that. Our goal is
to make sure every Member’s Mark item is developed based on what our members want
today.” [Illustration 6 -10]

Natural Channel Grocery Shopping
Chapter 6: The Retail Competition
August 2017 © Packaged Facts
182
Illustration 6-10
Member’s Mark New Organic Chicken Broth
Source: Sam’s Club

Natural Channel Grocery Shopping
Chapter 6: The Retail Competition
August 2017 © Packaged Facts
183
Walmart
Walmart is the largest retail store in the world, with nearly $500 billion in global sales in
2016, over $300 billion of which was in the United States. It has 4,700 U.S. stores, 1.2
million U.S. employees, and 260 million U.S. customers a week. Walmart initially entered
the natural and organic foods market in 2006, but its full-fledged efforts didn ’ t begin until
2014, when it teamed up with the Wild Oats brand in an attempt to provide more
reasonable prices on organic products, allowing customers to save up to 25% or more when
comparing Walmart ’