Adalbert of Prague

Sam's Club is trying to stand out against its larger, faster-growing rival Costco Wholesale Corp (COST.O) with trendier holiday merchandise this year, hoping that uggs on sale new goods will spur its members to spend more.
Its previous moves, including improving food and adding "treasure hunt" items such as $6,000 Cartier watches, have failed to spur strong results. Sales and the growth trajectory at the retail warehouse chain, part of Wal-Mart Stores Inc (WMT.N), continue to lag behind Costco.
"We've been underwhelming our members," Chief Executive Officer Rosalind Brewer said as she toured a new Sam's Club in Romeoville, Illinois, last week. Some goods just have not been "on trend" enough, she said.
When Wal-Mart meets with analysts and investors on October 15, Brewer will give more details about the merchandising strategy for Sam's Club, a membership-only retailer.
The chain is adding 132 new general merchandise goods for the holiday season, up from 56 a year ago. They include everything from sets of "heirloom" Christmas ornaments that look like ones sold in boutiques, to women's cheap ugg boots cheap ugg boots priced below the $200 or more they sell for at department stores.
Sam's Club has lacked a bit of the "flair" that Costco has, said Wolfe Research analyst Scott Mushkin. Adding new items may help but could be more of an "incremental positive" rather than really moving the needle, he said, without seeing the goods.
Costco has not changed its holiday strategy and is keeping an eye on its rival, Chief Financial Officer Richard Galanti said on October 9. Sam's Club's discount booklets, launched months ago, are similar to ones Costco has used for years.
"We are going to do what we do," Galanti said on a conference call. "If they keep doing it, it must be working."
Sales at stores open at least a year, a retail metric known as same-store sales, show that Costco has an edge. Costco's U.S. same-store sales rose 5 percent last quarter. Sam's Club's same-store sales rose 1.7 percent last quarter and it expects them to be flat to up 2 percent this quarter.
"The results have not been consistently barn burning while Costco's have," said Cowen & Co analyst Faye Landes. In the past, Sam's Club's formula has not seemed to be "quite as nailed down as Costco's," she said.
Sam's Club, which has http://tinyurl.com/pch83be 627 warehouses in the United States and Puerto Rico and is opening 15 to 20 more a year, declined to forecast sales or profit margins on the new items. Costco runs 638 warehouses, including 454 in the United States and Puerto Rico, and plans to open 18 more U.S. ones this fiscal year.
Sam's Club, which got its start in Oklahoma 30 years ago, has been trying to stand out as a warehouse of brand names. It is the only club to sell Apple Inc (AAPL.O) devices and also stocks items such as The North Face fleece jackets from VF Corp (VFC.N) and Under Armour Inc (UA.N) shirts.
It hopes to lure members like Sue Skeer to spend more. Skeer said she joined Sam's Club 16 years ago and goes there about twice a week, mainly to buy fruits and vegetables.
"I haven't really found anything that would draw me in" to make many impulse purchases, said Skeer, who lives in Granite Bay, California.
(Reporting by Jessica Wohl; editing by Andrew Hay)
Tweet this
Link this
Share this
Digg this
Email
Print
Reprints
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see website Comments (1) OkHank wrote: I�ve been a Sams club member for 21 years. It is sad they have dropped there �In business for small business� format now it�s be a Plus Member and throw the business under the bus. I have had no choice like many other businesses over the years to purchase from a food service. It amazing to me they don�t understand the dollars lost over all my personal example in 2004 I was spending 300k a year 2007 200k and now 2013 lucky to spend 40 - 50k that said were doing 4X the business now than in 2004
Many business members are disappointed the direction they have taken. But on a happier note Costco is coming to town!
Oct 12, 2013 7:45pm EDT -- Report as abuse This discussion is now closed. We welcome comments on our articles for a limited period after cheap ugg boots their publication. See All Comments
Rea
Obama makes rare campaign trail appearance, people leave early 19 Oct 201

Turkey to let Iraqi Kurds reinforce Kobani as U.S. drops arms to defenders | 6:58pm E

Obama makes rare campaign trail appearance, some leave early 5:13am E

Nigeria declared Ebola-free, holds lessons for others | 3:59pm E

U.S. stocks end higher despite drag from IBM 5:08pm E
Follow Reuters Facebo
Twitt
R
YouTu

Edition: U.
Arab

Argenti

Braz

Cana

Chi

Fran

Germa

Ind

Ita

Jap

Latin Ameri

Mexi

Russ

Spa

United Kingd

Back to t
Reuters.com Busine
Marke
Wor
Politi
Technolo
Opini
Mon
Pictur
Vide
Site Ind
More from Reuters Reuters News Agen
Brand Attribution Guidelin
Delivery Optio
Support & Contact Suppo
Correctio
Connect with Reuters Twitter
Facebook
LinkedIn
RSS
Podcast
Newsletters
Mobi
About Privacy Poli
Terms of U
Advertise With
AdChoic
Copyrig
Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.c
About Thomson Reute
Investor Relatio
Caree
Contact
Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interest
NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.