DALLAS, Texas — Sam’s Club, a subsidiary of Walmart, has announced an ambitious plan to accelerate its expansion efforts by launching approximately 15 new locations annually and renovating all of its nearly 600 establishments across the nation. This strategy was revealed by CEO Chris Nicholas on Wednesday during Walmart’s investor day.
With this expansion, Sam’s Club intends to double its membership base within the next eight to ten years, Nicholas stated.
This initiative follows the chain’s previous goal, set two years ago, to open around 30 new locations in the U.S. over a five-year period. This shift in strategy comes after the closure of 63 locations nationwide in 2018.
The timing of Sam’s Club’s accelerated expansion raises eyebrows, particularly amid economic instability caused by President Donald Trump’s substantial tariffs, which have created uncertainty on Wall Street about price hikes and consumer spending. Earlier on Wednesday, the retailer withdrew its first-quarter operating income forecast, admitting that profits might take a hit if they attempt to maintain prices despite increasing costs linked to tariffs.
In a discussion with Finance Newso, Nicholas expressed confidence in the resilience of consumer demand for Sam’s Club, even if economic conditions worsen. He suggested that the company’s emphasis on cost savings could become even more appealing to customers during challenging times.
“In times of plenty, we do well. But in tough times, we do really well,” he noted.
Warehouse clubs thrive amidst changing consumer behavior
Warehouse clubs like Costco and BJ’s Wholesale have seen increased popularity among U.S. consumers seeking greater value and bulk purchasing options over the last five years. This trend was particularly pronounced during the pandemic when consumers sought to stockpile supplies and weather supply chain disruptions while avoiding price surges from inflation.
BJ’s, primarily established on the East Coast, has announced intentions to launch 25 to 30 new locations across the next two fiscal years, with new sites planned for Florida, Georgia, Tennessee, and Texas.
Sam’s Club recently began its expansion with a prototype designed to represent its forward-looking approach. The new store, which opened in Grapevine, Texas, in October, marked the first new location since 2017. This facility, constructed to replace one destroyed by a tornado, features a modern design and a comprehensive digital retail strategy, eliminating checkout lanes and showcasing online-only products while enhancing facilities for e-commerce orders, including curbside pickup and home delivery.
According to Nicholas, this innovative store layout will be replicated across the nation as Sam’s Club continues its remodeling and new store openings.
By the closure of this fiscal year, Sam’s Club will have opened three new clubs in Grapevine, Texas; Tempe, Arizona; and Lebanon, Tennessee, with plans to begin construction on an additional seven locations that will not open until the following fiscal year, as the company ramps up to its goal of opening approximately 15 clubs annually.
The strategic expansion coincides with Sam’s Club’s efforts to maintain strong sales growth performance.
In the last fiscal year, taken to a close in late January, net sales reached $90.2 billion, reflecting a significant increase of around 53% compared to pre-pandemic sales figures from early 2020.
Comparable sales rose 5.9% year-over-year in the most recent fiscal cycle, excluding fuel. Customer transactions across both online and physical stores increased by 5.4% during the last reported quarter, which ended in late January. E-commerce sales surged by 24% within the same timeframe, driven by greater online purchases for in-store pickup or home delivery.
While Sam’s Club has not disclosed its total membership numbers, it did report a 13% increase in membership revenue for the fiscal fourth quarter.
Nicholas chose not to reveal the costs associated with the store renovations and new club openings. Walmart, Sam’s Club’s parent company, has increased its investment across various sectors, including updates to its stores and the automation of fulfillment centers and supply chain operations.
In the fiscal year concluding in late January, Walmart allocated $23.8 billion for capital expenditures. For the current fiscal year, the retailer has projected spending between $20.24 billion and $23.61 billion on capital initiatives, which encompass supply chain technology, store remodels, and the development of new clubs.
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