One of the reasons Sam’s Club has chronically lagged rival Costco Wholesale COST 1.17% in sales growth is simple: Costco’s stores are in more affluent parts of the country, serving wealthy suburbanites. Those customers increasingly demand high-quality food, and are willing to pay a premium for it.
Sam’s Club has reported better annual same-store sales growth than Costco only once since 2007. To close that gap, the Walmart Stores-owned warehouse club operator is making major changes to its business model, putting a much bigger focus on improving store food brands, opening new Sam’s Club locations in higher income zip codes, and giving regional buyers more say in what the retailer sells, particularly as it pertains to gourmet and natural foods.
Food generates more than half of Sam’s Club $58 billion in annual sales, so this is no small point.
To read the rest of the story, please go to: Fortune
