Wal-Mart To Court Hispanic Consumers
Last updated Tuesday, October 28, 2008 6:09 PM CDT in Business
By Kimberly Morrison
THE MORNING NEWS
Wal-Mart Stores Inc. said it plans to open a warehouse club format that will target Hispanics as part of a broader strategy to strengthen the Sam's Club segment.
Mas Club will open in the second quarter of next year in Houston, Doug McMillon, chief executive of Sam's Club told investors on the second day of Wal-Mart's annual investors' meeting.
"I'm pumped about it," McMillon said of the third alternate format to be introduced this year and the only new formats to be introduced in the 25 years of Sam's Club.
McMillon said the Bentonville-based retailer has no current plans to expand the format, adopting a wait-and-see approach for the prototype store's performance.
The retailer will also be evaluating the performance of two other new-to-market alternative formats for the warehouse club segment.
Last week, the retailer opened a small prototype in Garden City, Kan., that spans 100,000 square feet. The average club size is 132,000 square feet with some as large as 190,000 square feet.
McMillon said the reduced size could allow the company to enter new markets in lieu of a full-size club.
Also newly opened is the Sam's Club Business Center in Houston. The store made its debut in August and features more office, restaurant and convenience store supply items in addition to added business services like a copy center, mailboxes and delivery.
The company is also taking steps to strengthen the traditional Sam's Club format in hopes of retaining current members and attracting new ones from rival Costco Wholesale.
A large part of the strategy rests on communicating value on a shoestring advertising budget. Cindy Davis, executive vice president of membership and marketing, said the company introduced a profit calculator for businesses to see how they could combine Sam's Club products to save money and optimize food costs. Individual members are receiving an annual benefits summary to show them how much they saved in certain categories.
"We have to demonstrate value in everything we do," Davis said.
The other part of the strategic plan is delivering quality. In several fruit categories, including blackberries, peaches and pumpkins, the company has worked alongside researchers and seed companies to develop its own varieties.
Still, McMillon said the warehouse club continues to see shifts in spending, particularly in luxury items targeted to individuals. Diamond sales are down by double digits since 90 days ago, he said.
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diva0039 wrote on Oct 29, 2008 8:35 AM: