When Sam’s Club was launched 37 years ago by Walmart founder Sam Walton, the idea was to offer low prices to small businesses in the way the warehouse retailer’s larger sibling had done for everyday people.
All these years later, SBE’s (small business enterprises) like corner stores and restaurants remain a core part of Sam’s Club clientèle, accounting for as much as one-third of revenues by some estimates. So it was imperative as the pandemic broke out for Sam’s to help those customers weather a crisis that has been much harder on small business than large corporations.
“We had every club manager ring up their top 50 SBE’s,” Sam’s Club CEO Kathryn McLay told Fortune‘s Beth Kowitt at the Most Powerful Women Summit on Thursday. “‘As you’re thinking about setting your business back up, what do you need? How can we help you? How do we get you access to plexiglass? How do we get you access to masks, to gloves?” she recalled. She added: “We really want to be an enabler to help support them.” There are nearly 600 Sam’s Club U.S. locations.
McLay, an Australian who became Sam’s Club CEO in November after a few years at Walmart, recalled that it was on a March tour of a store in Chicago that she realized how serious the COVID crisis would be, noting anxiety on customers’ faces as they panic-shopped. It was so hectic, she found herself helping bring carts back to the front of the club, as the chain calls its stores, in an all-hands-on-deck moment.
At the same time, the pandemic has not been without benefit for Sam’s Club. Like its sibling Walmart and rivals Costco and Target, Sam’s has seen business boom during the crisis: in the fiscal second quarter, Sam’s comparable sales grew 17.2%, excluding fuel and tobacco, while digital sales rose 39%, the result of years of investments in Sam’s e-commerce infrastructure and initiatives. Crucially, membership income, a top priority for McLay, rose 7.8% in the quarter. Attracting new members is essential in sustaining sales growth.
And Sam’s tech initiatives helped spur its strong numbers this year. Those include the Scan-and-Go tech it developed that allows shoppers to ring up their own orders as they walk a club and check themselves out, as well as curbside delivery for shoppers wanted to minimize time in stores.
“All of this disruption actually gave usy an opportunity to accelerate our strategy,” she said. “The pandemic gave us momentum behind our strategy.”