Sam's Club - The Walmart Format for small retailers

According to the details of Wal-Mart-Bharati alliance being announced so far, Wal-Mart will be owning and managing Cash and Carry wholesale trade in India. It may be recalled that, as per present policy guidelines, a foreign entity can own up to 100% of equity in this format of retail trade. Wal-Mart, which operates a separate Cash & Carry division under Sam’s Club brand, is quite strong in this format of retail business. Sam’s Club, contributes as much as one eighth of Wal-Mart’s turnover. Here then is a quick run down on What, Where and How of the Sam’s Club operations:

Sam’s Club, named after the founder of Wal-Mart, Sam Walton, is a membership-only warehouse club (cash and carry wholesale). Wal-Mart owns and operates this division, the firs store of which was opened in the USA in 1983. Apart from the USA, Wal-Mart has Sam’s Clubs operating in China, Brazil, Puerto Rico, Mexico and Canada.

Purchases at Sam’s Clubs, except for items in the Optical, Pharmacy, or Cafe sections, could be made by registered club members only. The Club Membership, with varying benefits, is available in four flavours: Business ($35), Business Plus ($100), Advantage ($40) and Advantage Plus ($100). While, the membership is required to be purchased at Sam’s Club; a one time day pass may be obtained from the company’s website or through newspaper ads. A 10% surcharge is added to the prices for non-members. Sam’s Club markets items under the private labels Member’s Mark, Bakers & Chefs, and Sam’s Club.

Sam’s club focuses on small businesses as its target customers with promotional tag line: “we are in business for small business.”

Many of the Sam’s Club members are small businesses, who offer their customers a small selection of items without the expense of having them delivered. Like other warehouse clubs (also known as cash and carry wholesale traders), most merchandise at Sam’s Club is sold in bulk and directly off the pallets. Clubs are arranged much like a warehouse, with merchandise stocked in warehouse-style steel bins.

There are more than 550 Sam’s Clubs in the United States with an average retail space of 128,000 square feet (12,000 m²) or 3 acres (1.2 ha). The largest Sam’s Club is located in Utica, Michigan, with over 145,000 sq. ft. of retail space.

Source : IndiaRetailBiz