Business

Sam’s Membership goes for greater turkeys, extra toys

Walmart-owned Sam’s Club believes members will add up the Christmas decorations as they host more gatherings for family and friends.

Melissa Repko

From bigger turkeys and bigger Christmas trees to more brands of toys, Walmart’s Sam’s Club is betting that consumers will make it big with holiday celebrations this year.

The members-only warehouse club said Friday that when it comes to selecting and ordering Christmas items, it has large gatherings and a backlog in its sights on large gatherings. It doubled the size of popular Christmas side dishes, mashed potatoes and sweet potatoes, from two pounds to four pounds. It developed desserts that were meant to please an audience, such as Christmas-themed cupcakes and brownie-topped cheesecake. And it has introduced a new service that puts 6 and 12 bottle packs of wine on customers’ doors to help them stock up for a party.

Tony Rogers, Sam’s Club chief member officer, said in polls and during focus groups on Zoom, members told the company that they intend to meet up with family and friends and enjoy aspects of the holiday season that they may have missed.

“People just felt like they were stolen from them last Christmas, and they are eager to return to some of these traditions with their family and friends,” he said. “Our member tells us that this year they will come back to it like never before.”

Plus, he said, the typical Sam’s Club customers are the type of person who coaches Little League games, hosts parties, and teaches Sunday school – and tends to get into the season from setting snacks to decorating and choosing more perfect Gifts.

Sam’s Club is adding more than 25 new toy brands this Christmas season, including LEGO, Segway and Rainbow High.

Melissa Repko

The official health guidelines for holiday meetings are pending. The Centers for Disease Control and Prevention posted recommendations on their website, but then pulled down the safety tips. Officials told NBC that the agency would publish its guidelines soon. The published material suggested opening doors and windows or using a fan to increase ventilation if an event needs to be held indoors. It also encouraged people to consider virtual gatherings instead of meeting people from other households.

Dr. Isaac Bogoch, an infectious disease doctor and professor at the University of Toronto, said Covid-19 vaccinations would “offer significant protection” to any family gathering this holiday season. But he said people need to think about who will be attending. A frail, elderly person or a child who has not been vaccinated may be at increased risk of infection.

“People should really think about what their potential risks are, who will be there, who is at risk, who is vaccinated and plan accordingly,” he said.

New traditions mix with old ones

The pandemic has inspired Sams to make some new additions to his vacation offering. For example, Chief Merchant Megan Crozier said his bakery will sell do-it-yourself kits to decorate cupcakes and cookies. Sam’s Club started selling the kits in the spring of 2020 when families looked for kid-friendly activities to do at home.

Crozier said Sam’s Club is “bringing back the big turkeys” after selling many smaller ones last year. It’ll sell the same size range as last year – between 10 and 24 pounds – but Sam has stocked up on the heavier turkeys of 18 pounds or more based on insights into how its members plan to party. It also ordered lamb, ribs, and salmon because people experimented with different Thanksgiving and Christmas menus last year, she said.

Early estimates call for stronger sales growth this holiday season, with both Bain and Deloitte forecasting a year-over-year increase of at least 7%.

Sam will try to capture as much of it as possible. It will have twice as much sales and sponsorship activity. Sixty stores will host street shows with samples, product presentations and virtual Christmas visits. Five are celebrated even more noticeably, complete with a temporary ice rink.

Members will find more choices as the retailer has added more than 25 new toy brands, including Rainbow High and Segway. Sam has also ordered more matching Family and Mommy and Me pajama sets this year after they were such a top seller last year, she said.

“Cozy and comfortable is here to stay,” said Crozier.

Sam’s Club has created Christmas desserts that are designed to be crowd-pleasers, including a brownie-topped cheesecake and pumpkin and spice cake balls.

Melissa Repko

Boom in the warehouse club store

Warehouse club shops have seen membership spike during the pandemic as people bought groceries and household items in bulk and a wave of families moved to larger homes in suburban and rural areas with larger pantries. The category has also benefited as millennials get married, have children, and buy houses.

Sam’s Club said its membership hit a record high in the most recent quarter ended July 30, but no concrete numbers are known. Its competitors Costco and BJ’s Wholesale Club have gained new members and increased sales even during the global health crisis.

Costco has more than 800 stores, including some in other countries such as Canada, China, and Mexico. Like-for-like sales increased 13.4% year over year for the last fiscal year ended August 29, excluding the impact of changes in gas prices and exchange rates.

BJ’s, a smaller, more regional chain with over 215 clubs, posted a comparable jump in sales of 21.3% last year, which ended January 30, excluding fuel sales.

Sam’s Club has nearly 600 stores. In the fiscal year ended January 29, comparable sales increased by 11.8% compared to the previous year excluding fuel.

Crozier said Sam’s Club was placing orders early and plentiful enough to meet buyer demand, even though supply chain disruptions delayed deliveries and limited supply. She said stores are designed to feel like a “treasure hunt” where people come across interesting items even when what they ordered is out of stock.

“Something may be sold out, but something new comes right behind it,” she said.

That didn’t stop Sam’s Club from launching its very first Christmas catalog to promote hot toys and popular gifts. It will land in the mailboxes earlier this month.

“We’re making sure we tell them this year it’s a ‘while supplies last’ situation,” said Ciara Anfield, vice president of marketing. “There is a reality, when you see something you like, you have to buy it.”

– CNBC’s Berkeley Lovelace Jr. contributed to this story.

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