Sam's Club, a membership-based warehouse club owned by Walmart, is closing stores across the US. This is not the first time the company has closed stores, as it also closed 63 locations in 2020.
The closures are part of a larger trend in the retail industry, where brick-and-mortar stores are struggling to compete with online shopping. This shift has been accelerated by the COVID-19 pandemic, which forced many stores to temporarily close their doors.
Sam's Club has been working to adapt to this new reality, investing in its e-commerce platform and same-day delivery services. This effort aims to provide customers with a more seamless shopping experience, both online and in-store.
The company has also been focusing on its core membership model, which offers benefits like discounts, free shipping, and exclusive services to its loyal customers.
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Sam's Club Store Closures
Sam's Club is closing 63 stores across the country. This news comes as a surprise to many employees who found out they were losing their jobs when they showed up to work.
The closures are part of a strategic decision to "right-size" their fleet and better align their locations with their business strategy. This means that some stores were built in areas that didn't grow as expected.
Sam's Club CEO John Furner confirmed the closings in an email to employees, stating that they had built clubs in some locations that impacted other clubs. He also mentioned that population growth in some areas didn't meet expectations.
10 of the closed locations will be turned into e-commerce distribution centers. This is a significant change for the employees who worked at those stores, as they can re-apply for jobs at the redesigned facilities.
The first e-commerce distribution center will be located in Memphis, and it's unclear how many employees will be affected by the closures. The company has not released any information on the number of employees who will lose their jobs.
In total, closures have been reported in 24 states, including Alaska, Alabama, Arizona, California, Connecticut, Florida, Georgia, Illinois, Indiana, Louisiana, Maryland, Michigan, Minnesota, New Hampshire, New Jersey, New York, North Carolina, Ohio, Tennessee, Texas, Virginia, Washington, and Wisconsin.
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Implications for Small Business
Small businesses are in for a shock with the closure of 63 Sam's Club stores. Hundreds, even thousands, of local merchants will be negatively impacted.
Many small business owners rely on Sam's Club for discounts on bulk purchases, financing, payment solutions, and even healthcare insurance. They pay an annual fee for these services.
Joe Gerace, a Chevron store owner in Anchorage, Alaska, buys over 300 items from Sam's Club, spending about $50,000 every month. He's not alone in his reliance on the store.
Tamm DiCecca, a cake shop owner in Greece, New York, buys most of her supplies from Sam's Club. She's not happy about the store's closure. The chain plans to close four of its 16 locations in the state.
In Florida, Roberto Torres, the owner of Blind Tiger Cafe, visits Sam's Club three times a week. He buys 30 percent of his cleaning supplies there and was planning to buy a safe and security cameras.
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This isn't the first time Sam's Club has closed stores. In 2016, Walmart closed 250 Sam's Club locations. There are still almost 600 Sam's Clubs in operation around the country.
BJ's Wholesale Clubs and Costco are hoping to fill the void left by Sam's Club. BJ's has already seen an "immediate increase" in new memberships, according to a New York Times report.
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