The Walmart owned warehouse chain, Sam’s Club recently announced that it will be tweaking a crowd favorite membership perk and membership holders are going to love it.
Sam’s Club is here to compete
Costco Wholesale and BJ’s pose tough competition for Sam’s Club, however, bargain hunting customers during the holiday season that just passed may have just moved Walmart’s warehouse counterpart up in the rankings for affordable retailers.
According to Walmart’s earnings report for the final quarter of 2024, Sam’s Club recorded a 5.7% year-over-year increase in net sales in the United States. This growth appears to be especially concentrated in the food, and health and wellness departments.
The retailer operates with a business model similar to that of Costco whereby shoppers must be in possession of a membership in order to be able to shop at the warehouses. A Sam’s Club membership costs between $50 and $110 annually, making its slightly cheaper than that of its competitor Costco.
During the quarter, Sam’s Club has welcomed new members and has enjoyed a 12% year-over-year increase in membership income in the country. During a recent earnings call in February, Sam’s Club CEO Chris Nicholas confirmed that, “Membership in Sam’s Club is at all-time highs as our renewal rates.”
New perk at the warehouse club
Competition amongst the warehouse clubs in the retail sector is quite close with both Costco and BJ’s also recording an increase in sales, much like Sam’s Club. As such, the simplest way to entice new customers is by adding new perks or bettering current membership benefits and that is precisely what Sam’s Club is doing.
In the wake of its significant growth, the warehouse club will be following in the footsteps of its peer Costco as it extends the operating hours for the majority of its gas stations from next month.
From April 12, the retailer will change the opening hours for 90% of its gas stations to 6:00am and the closing time will be extended by an hour as well. From Monday through to Saturday, the filling stations run by the warehouse club will be open until 10:00pm each night and on Sundays, they will be open until 8:00pm.
According to a statement emailed to The Street, the warehouse club shared that, “We’re making these changes to accommodate the varied schedules of our members and provide greater convenience.”
Parallel to this move, Walmart also has ambitious plans in motion to grow its own gas station offerings. The retailer recently announced that it will be revamping and adding at least forty-five new gas stations during the course of this year.
After noting a slight dip in comparable gas sales for the fourth quarter of the 2024 period, Costco made the decision to extend the working hours of its gas stations in a bid to draw in more customers.
“Gas comps were negative low single digits during the quarter, driven by the average price per gallon being down slightly,” Costco Chief Financial Officer Gary Millerchip explained during the March 6 earnings call.
According to the announcement, Costco gas stations will now operate from “Monday through Friday from 6 a.m. to 10 p.m., Saturday from 6 a.m. to 8:30 p.m., and Sunday from 6 a.m. to 7:30 p.m.”
These retailers are being pushed to implement these kinds of changes likely as a result of a drop in the national average of gas prices which began decreasing around April of last year. At the moment, the average price per gallon of gas in the country is $3.10 which ramps up competition for these warehouse club run gas stations like Costco or Sam’s Club. The selling point of these gas stations is the lower prices offered exclusively to members, making it no surprise that they are now opting to work longer hours with the hopes that this sense of flexibility will retain old customers and draw in new ones.