Sam’s Club, the place to go when you need a gallon-sized jar of pickles, is asking regional vendors and organic produce providers to fill its aisles with luscious goods. Yes, the warehouse club unit of Wal-Mart Stores, Inc. is embracing more local and organic food. And no, hell hasn’t frozen over. The chain is just looking to improve sales.
“Attracting and and keeping customers has taken on a new importance for Sam's Club after a 0.5-percent fall in sales at existing stores in the quarter ending in January, the first drop since early 2014,” STL Today reports.
To stop the profit bleed, the company hired a handful of local buyers in its Dallas market and may add more buying teams in five other markets to find products that could attract new customers and improve sales.
Having the buyers located in areas in which they are buying for allows them to get on the trail of specialty, local, organic products that are sold by local and regional providers. Items, such as “organics, craft beer and unique salsas are examples of the types of product buyers would look to bring into the club," John Furner, chief merchandising officer at Sam's Club, says.
Premium Produce to Catch Up with Competition
Although Sam’s Club is making these changes to make more cash, it also decided to make updates to its buying plans because other warehouse grocery chains have made the organic leap already.
“Costco has grown into one of the largest U.S. food retailers, selling more than $4 billion worth of organic products annually, surpassing even Whole Foods, according to a BMO Capital Markets research report last year. Sam's Club, which gets more than half its revenues from groceries and consumables, does not disclose its organic sales,” STL Today reports.
Target is already making similar moves to great success, "while Amazon, whose Prime subscription service makes it very much a membership-based retailer, is expanding its online delivery service for groceries,” Sam’s Club Bets on Fancier Food to Steal Customers from Costco" target="_blank">Fortune adds.
Whole Foods is about to launch its chain of lower-priced stores in Los Angeles in May, called 365 by Whole Foods Market.
In addition to selecting more upscale food to sell in stores, Sam’s Club also plans to start building stores in areas of the country that have more affluent shoppers. This is a “key plank of Sam’s growth strategy and increasingly the target demographic for warehouse clubs,” STL Today reports.
These changes to Sam's Club appear to be welcome additions, we wish the chain would go a step further and work exclusively with local farmers. Hey, we can dream, can't we?
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