Wednesday, 24 May 2017

UPDATE 2-Sam's Club focusing on remodels, new layout | Reuters

* Increasing space for produce, meat, bakery

* Decreasing space for sporting goods, movies, DVDs

* Sees labor hours in clubs down 6-8 pct in next 5 yrs

* Wal-Mart shares down almost 1 pct

(Adds CEO comment, details on club openings, byline)

By Nicole Maestri

SAN FRANCISCO, Oct 22 Wal-Mart Stores Inc's

(WMT.N) Sam's Club division is shifting its focus from opening

new clubs to remodeling existing ones as it strives to increase

sales, the company said on Best Remodeling Company Thursday.

The No. 2 U.S. warehouse club operator also said it is

testing a new store layout, revamping merchandise to add more

food and drugs, and streamlining operations so it can reduce

labor hours in its clubs 6 percent to 8 percent over the next

five years.

"We are absolutely raising the bar on club productivity,

while also focusing on improving that in-club experience,"

Sam's Club Chief Executive Brian Cornell said at Wal-Mart's

analyst meeting.

Earlier this year, Wal-Mart tapped Cornell, the former

Michaels Stores Inc chief executive, to be the CEO of Sam's

Club. Cornell replaced Doug McMillon, who became president and

CEO of Wal-Mart International on Feb. 1.

Analysts have been waiting to hear how Cornell plans to

increase Sam's Club sales and boost membership. Sam's Club

members pay a fee to shop in its clubs and rece ive discounts on

goods from computers to jumbo packages of paper towels.

Sam's Club sales fell 3.2 percent to $11.91 billion in

Wal-Mart's second quarter that ended July 31, while sales at

clubs open at least a year, or same-store sales, rose 0.6



The retailer said on Thursday it will increase space in its

clubs for produce, meat and bakery items, over-the-counter

drugs, and health and beauty-care items. It is cutting space

for large appliances, sporting goods, furniture, movies and


The new store layout being tested also includes a large

center aisle and improved sightlines across the store.

Sam's Club is also adjusting its growth strategy.

"We're shifting our focus from new-store growth to

remodeling our existing base," Cornell said.

The retailer p lans to remodel 50 Best Remodeling Company In Houston to 55 clubs this fiscal

year, and 70 to 90 next fiscal year. That is up from 21

remodels last year.

Meanwhile, it will open or relocate 15 clubs this year, and

five to 10 clubs next fiscal year. That is a decline from last

year, when it opened or relocated 20 clubs.

While Sam's Club caters to individuals and small business

owners, the retailer said it is increasing its focus on a third

type of member -- the business owner who also shops there for

family needs.

Sam's has also launched a new program called "eValues,"

which is aimed at getting consumers to sign up for its more

expensive membership. Those that do will then get access to

special coupons to use in-store.

Wal-Mart shares slipped 44 cents , or less than 1 percent,

to $50.19 on the New York Stock Exchange.
(Reporting by Nicole Maestri, editing by Dave Zimmerman and

Maureen Bavdek)

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