• The Wall Street Journal writes that the decision by Walmart to close down 63 Sam’s Club stores - and convert ten of them to e-commerce distribution facilities - isn’t just “a result of retail’s rapid shift online, but (is) part of a strategy pivot by new Sam’s Club Chief Executive John Furner to turn what has long been Wal-Mart’s underperforming sibling into a retailer that can rival its most successful competitor, Costco.”
According to the story, “Sam’s Club hopes that by strategically closing underperforming stores, it can fine-tune its focus on stores that are driving higher profits, especially those that serve a higher-income clientele.
Under Mr. Furner Sam’s Club plans to target a single demographic: families with children and annual incomes between $75,000 and $125,000. The new target came into focus after Sam’s built an internal team and hired consultants from Bain & Co. to review purchasing behavior, discovering many shoppers classified as small-business buyers actually bought more products for their homes.”
The Journal writes that targeting higher-income shoppers hardly is a new idea for Sam’s Club, but that frequent management changes and a lack of strategic focus hindered the retailer’s ability to deliver on its expectations.
According to the story, “Sam’s Club hopes that by strategically closing underperforming stores, it can fine-tune its focus on stores that are driving higher profits, especially those that serve a higher-income clientele.
Under Mr. Furner Sam’s Club plans to target a single demographic: families with children and annual incomes between $75,000 and $125,000. The new target came into focus after Sam’s built an internal team and hired consultants from Bain & Co. to review purchasing behavior, discovering many shoppers classified as small-business buyers actually bought more products for their homes.”
The Journal writes that targeting higher-income shoppers hardly is a new idea for Sam’s Club, but that frequent management changes and a lack of strategic focus hindered the retailer’s ability to deliver on its expectations.
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