Sam’s Club gunning for FDM market

Growing the health-and-wellness business remains a top priority for Sam’s Club as the warehouse club operator has identified those key categories as areas where it can demonstrate value, drive member loyalty and gain market share.

Sam’s has high expectations for health and wellness, along with food and consumables, as it looks to deliver on its brand promise of “savings made simple” and maintain the same-store sales momentum experienced throughout 2010 that culminated with a 2.7% gain in the fourth quarter.

That means placing an increased emphasis on the presentation of health-and-wellness 
categories in clubs while adding new services, such as hearing centers, conducting monthly health screenings and participating in exclusive distribution agreements with such well-known brands as GNC.

Looking at the company’s new and remodeled clubs, there is an unmistakable emphasis on health and wellness from the moment members set foot in the building. The pharmacy is highly visible thanks to colorful overhead signs, while leading brands in all the major drug store categories are merchandised on what typically are four 50-ft.-long shelving runs that lead to the pharmacy.

It’s a good look, and the business results are there, according to the company. So Sam’s remains committed to a multiyear process that emphasizes upgrading the existing club shopping experience rather than significantly expanding beyond an existing base of 609 clubs. Sam’s Club will spend about $1 billion this year to remodel 60 to 70 clubs while opening, expanding or relocating an additional seven to 12 units.

And as it places further emphasis on health and wellness, it is conceivable the company could see more meaningful contribution from those categories. Last year, the health-and-wellness categories — which Sam’s Club defines as pharmacy, optical services and over-the-counter drugs — accounted for 5% of sales, the same as the prior year.

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