Walmart-owned Sam’s Club plans to open about 30 new stores over next five years

walmart-Famous Sam’s Club said Thursday it will open more than 30 new stores in the US, marking its most aggressive expansion in years.

The next Warehouse Club store is expected to open in Florida in 2024. Sam’s Club also plans to open five fulfillment and distribution centers this year, the first of which will open in Georgia.

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CEO Cath Maclay said the retailer is looking to reach more customers following a sharp increase in sales and an all-time high in membership at its existing clubs. It plans to have about 30 clubs in the next five years and more are likely in two years, she said.

And, McClay added, because the prices of goods and services remain highThat said, Sam’s offering has become more relevant.

“During times like inflation, times when people are under pressure from their household budgets, this is a time when Sam’s Club can really show up,” she said in the CNBC interview. “So I think the timing is really right for us.”

For Sam’s Club, this expansion marks a return to store footprint growth. The Club chain has about 600 stores in the US, including Puerto Rico. Yet it hasn’t opened a new club in years. It closed 63 clubs nationwide in 2018, converting a small number of those clubs into e-commerce fulfillment centers.

Its last major expansion was in the 2010s, when it opened an average of five to 10 clubs per year. Its most recent new club opened in 2017 in Hanover, Pennsylvania.

Maclay said the new stores would open in high-growth suburban areas where Sam’s Club has few or no stores, but declined to specify the locations, citing competitive reasons. He declined to say how much it would cost to build the company’s clubs and e-commerce facilities.

It will also add more people to the Sam’s Club workforce. Maclay said each club typically employs about 150 to 175 people. At its fulfillment centers, such as the one in Georgia, Sam’s Club typically employs more than 1,000 people and its distribution centers average about 120 employees.

The new Sam’s Club stores will be approximately 160,000 square feet — larger than Sam’s Club’s typical footprint of approximately 140,000. These will include additional space for a sushi island, a full-service floral area and a large waiting area for customers with hearing or optical appointments.

The new clubs will cater to habits that buyers have picked up during this period covid pandemic, as well. There will be more dedicated space for online options, such as a canopy where drivers can receive orders by curbside pickup and large coolers to help staff prepare online orders for delivery.

Over the past three years, more customers have turned to warehouse clubs, including Sam’s Club rivals costco And BJ’s Wholesale Club, In the early days of the pandemic, shoppers stocked their pantries with value packs of toilet paper, food and more. Then, as gas prices rose last year, the club Attracted customers by offering an inexpensive way to fill the tank. And as inflation hit a four-decade high, it spurred interest in buying private label and wholesale club items as a way to stretch the dollar.

This is reflected in stock gains. For example, shares of Costco are up nearly 60% since the pandemic began.

Sam’s Club is also opening stores along with its rivals BJ’s and Costco.

Sam’s Club has seen close to double-digit same-store sales gains for more than a year, excluding fuel costs. In the most recent quarter, which ended in late October, its same-store sales rose 10%, or about 24% on a two-year basis. Its subscription revenue grew by 8%.

Private labels are also a big draw for warehouse clubs. Maclay said Sam’s Club’s private brand, Member’s Mark, accounts for 30% of store banner sales and more than a third in terms of units.

For Walmart, Sam’s Club’s expansion plan marks another bullish move for Walmart, at a time when some economists are forecasting a recession and other retailers are bracing themselves for a tough year. On Tuesday the retail giant said it would Raise the minimum wage for Walmart store employees In early March it competes for talent.

Jefferies retail analyst Corey Tarlowe said Club Channel, in particular, holds up well even during economic downturns.

“People don’t really cut their subscriptions, believe it or not, because they have to buy food and they want to buy food at the cheapest price possible,” he said. “So they keep their membership and some people do business in the club channel.”

Along with its store expansion plan, Sam’s Club has stepped up efforts to compete with other grocers and clubs. it raised its membership fee in October, Bringing it closer to Costco. It redesigned existing clubs to be brighter and less cluttered. And it’s added tech-enabled features to Scan & Go, a mobile app that allows customers to skip the cashier line, check out quickly at the gas pump, and more. Ship bulky items like TVs instead of taking them home.

and in November, it slashed the price of its hot dog-and-soda combo From $1.50 to $1.38 – undercutting rival Costco’s $1.50 combo.