Wal-Mart Stores Inc.’s makeover of its Sam’s Club stores, adding fruits, vegetables and other fresh foods, scores “good marks” so far, retail industry analyst Bruce Peterson said.

Sam’s Club attempts fresh food makeover


Sam’s Club has been effective with its fresh food program, Peterson said Sept. 16. The company has been “very careful” not to have too many fresh food stock-keeping units — and has done a good job with seasonal promotions of products such as raspberries, he said.

The Bentonville, Ark., based retailer last October announced plans to remodel about a fourth of its nearly 600 U.S. Sam’s Clubs locations, increasing space for fresh produce and meat as well as beauty and health products and over-the-counter drugs.

As of last month, Wal-Mart had completed remodeling projects on 33 stores and another 16 were under construction, Brian Cornell, chief executive officer of Sam’s Club, said during an Aug. 17 conference call. There were another 70 Sam’s Club stores scheduled for remodeling.

The goal of the remodeling projects is to “increase the assortment of highly productive merchandise categories, such as fresh foods,” Cornell said.

“We continue to be pleased” with the effort, Cornell said. “Overall, our members are pleased with the key changes.”

For the fresh produce industry, club stores, which charge annual membership fees for access to bulk, discounted goods, are an expanding market as traditional grocery chains and restaurants struggle with stagnant sales amid a weak economy.

But club stores typically offer fewer varieties of fruits and vegetables than a traditional supermarket, said Peterson, who is president of Fayetteville, Ark.-based Peterson Insights and formerly head of Wal-Mart’s perishables operations. While a supermarket may offer 600 fresh produce SKUs, a club store may have about a third of that, he said.

Fresh produce growers will sell more “if you’re in the categories Sam’s is going to carry,” Peterson said. “They might carry two varieties of tomatoes instead of 10. They might have six varieties of apples, not 15.”

While Sam’s Club has more U.S. stores than any other club store operator, it still lags Costco Wholesale Corp. in sales. In Costco’s fiscal 2010 third quarter, sales rose 12% to $17.4 billion. Sam’s Club sales rose 2.2% to $12.5 billion in the company’s most recent quarter.

“Costco is probably doing it better than anybody” among club store operators, Peterson said. “But Sam’s is really making strides.”