Sam’s Club is opening a store in the Dallas area that will require customers to go all digital. Shoppers will use a smartphone app to scan and pay for their own purchases rather than standing in a checkout lane.
Sam’s Club
DALLAS, Texas β Walmart-owned Sam’s Club plans to supercharge its expansion by opening about 15 new stores per year going forward and remodeling all of its approximately 600 locations across the country, the warehouse club’s CEO Chris Nicholas said on Wednesday.
With the boost from those new locations, Sam’s Club aims to double its membership over the next eight-to-10 years, he said at Walmart’s investor day.
Sam’s Club already had aggressive expansion plans. The chain announced two years ago that it would open about 30 new stores in the U.S. over the next five years. That was a shift after Sam’s Club shut 63 locations across the country in 2018.
Yet Sam’s Club is speeding up expansion at a surprising time: President Donald Trump’s broad and steep tariffs have shaken Wall Street and injected fresh uncertainty about price increases, the U.S. economic outlook and consumers’ willingness to spend. The retailer pulled its first-quarter operating income forecast earlier Wednesday, saying profits could suffer if it tries to keep prices steady when costs increase due to tariffs.
In an interview with CNBC, Nicholas said he’s confident that demand for Sam’s Club will hold up, even if the economic backdrop gets worse. In fact, he said, the warehouse club’s focus on saving customers money may gain even more relevance.
“In times of plenty, we do well. But in tough times, we do really well,” he said.
Warehouse clubs gain traction
Warehouse clubs, including rivals Costco and BJ’s Wholesale, have benefitted from U.S. consumers seeking value and larger quantities of items over the past five years while stocking up during the pandemic, weathering Covid-related supply chain shocks and looking to avoid higher prices from inflation.
Sam’s Club rivals Costco and BJ’s Wholesale Club are both expanding, too. Costco, which has roughly 620 locations in the U.S., expects to open 28 new clubs during its current fiscal year, including three planned relocations of current clubs, its CEO Ron Vachris said in early March on an earnings call. He did not say how many of those clubs will be in the U.S.
BJ’s, a Massachusetts-based retailer that’s historically had more clubs on the East Coast, announced plans to open 25 to 30 new locations over the next two fiscal years, including in parts of Florida, Georgia, Tennessee and Texas.
Sam’s Club began its recent expansion by rolling out a club designed to represent its future. The new location, which opened in the Dallas suburb of Grapevine, Texas in October, was its first new store since 2017. The location, which replaced one destroyed by a tornado, has a new look and an all-digital approach to retail. It has no checkout lanes, store displays of online-only items and a larger area for fulfilling e-commerce orders for curbside pickup and home delivery.
Sam’s Club will take that store format nationwide as it remodels and opens new clubs, Nicholas said.
By the end of this fiscal year, Sam’s Club will have opened a total of three new clubs in Grapevine, Texas; Tempe, Ariz. and Lebanon, Tenn. It plans to start construction of seven additional locations that won’t open this fiscal year, as it ramps up store openings to the around 15 clubs per year pace.
The warehouse club is opening a wave of new stores as it tries to sustain strong sales growth.
Net sales for Sam’s Club totaled $90.2 billion in the most recent fiscal year that ended in late January. That represents a roughly 53% jump from the pre-pandemic fiscal year that ended in early 2020.
Sam’s Club’s comparable sales rose 5.9% year over year in the most recent fiscal year, excluding fuel.
Customer transactions across the website and store rose 5.4% in the company’s most recently reported quarter, which ended in late January. E-commerce sales shot up 24% during the period, as more customers ordered online for store pickup or got purchases dropped at their doors.
Sam’s Club does not disclose its total number of members, but reported that membership income rose 13% in the fiscal fourth quarter.
Nicholas declined to say how much Sam’s Club’s renovations and new clubs will cost. Its parent company Walmart has stepped up investments across its business, including remodels of its namesake stores and automation of fulfillment centers and other supply chain facilities.
Walmart spent $23.8 billion on capital expenditures in the fiscal year that ended in late January. In the current fiscal year, the discounter said it plans to spend between $20.24 billion and $23.61 billion on capital expenditures, including supply chain technology, store remodels and new clubs.
