• Walmart announced yesterday that it will begin offering a special limited membership to its Sam’s Club stores - $10 for 10 weeks, which it believes will be enough to demonstrate value and get shoppers to sign up for long-term memberships (the lowest of which costs $40 for a full year…actually a little cheaper than the special when looked at on a per-week basis).
• In an interview with Fortune, Sam’s Club CEO Doug McMillon addressed, among other things, the tough economy and the impact he thinks it will have on Sam’s. Some excerpts:
On the economy… “We don't think next year is going to look a lot better than this year. I wish you could tell me what gasoline is going to be. As we think about next year, our focus is going to be very similar to this year - manage your expenses, be thoughtful about how you spend capital, and within those discretionary categories, take some risk but have conviction about where you take risk.”
On Sam’s competitive advantage… “Look at retailers that have been having a difficult time - the consumer shifted money toward basics, and if you're dependent on specialty apparel or some specialty hard line, I'm sure your trip count was impacted. At Wal-Mart and Sam's we have basic necessities, and that value position creates traffic. So in an environment like this, we have a bit of a hedge, and many retailers don't.”
On the company’s sustainability initiatives… “It's been an interesting journey. I remember the first conversation that Lee had with a group of us, and I didn't really understand what he was talking about. "Sustainability" was defined in a financial sense for me. As he started to broaden the conversation into the environment and then social issues, it sounded like potentially a big distraction. But in fact it fits within our overall mission - to save people money so that they can live better.
“We underestimated how much financial benefit we could get from it. We found items that if you simply reduce the amount of packaging involved, save cost, and pass that on to the customer, you sell more. You're just eliminating waste. We thought we were efficient before, but we really weren't. It was as if somebody handed us a different pair of glasses, and the whole world looked different.”
• In an interview with Fortune, Sam’s Club CEO Doug McMillon addressed, among other things, the tough economy and the impact he thinks it will have on Sam’s. Some excerpts:
On the economy… “We don't think next year is going to look a lot better than this year. I wish you could tell me what gasoline is going to be. As we think about next year, our focus is going to be very similar to this year - manage your expenses, be thoughtful about how you spend capital, and within those discretionary categories, take some risk but have conviction about where you take risk.”
On Sam’s competitive advantage… “Look at retailers that have been having a difficult time - the consumer shifted money toward basics, and if you're dependent on specialty apparel or some specialty hard line, I'm sure your trip count was impacted. At Wal-Mart and Sam's we have basic necessities, and that value position creates traffic. So in an environment like this, we have a bit of a hedge, and many retailers don't.”
On the company’s sustainability initiatives… “It's been an interesting journey. I remember the first conversation that Lee had with a group of us, and I didn't really understand what he was talking about. "Sustainability" was defined in a financial sense for me. As he started to broaden the conversation into the environment and then social issues, it sounded like potentially a big distraction. But in fact it fits within our overall mission - to save people money so that they can live better.
“We underestimated how much financial benefit we could get from it. We found items that if you simply reduce the amount of packaging involved, save cost, and pass that on to the customer, you sell more. You're just eliminating waste. We thought we were efficient before, but we really weren't. It was as if somebody handed us a different pair of glasses, and the whole world looked different.”
- KC's View:
- Like the company or not, these stories make very clear that Walmart is going to be true to its core values while continuing to stress value…which to many consumers will be an irresistible lure.
