Sam’s Club CEO Rosalind Brewer told the media last week that the wholesale club continues to find ways to pack more value into its memberships in response to poor first quarter numbers and competitive pressures in the retail sector.
Brewer has said more than once that first quarter sales were disappointing and unacceptable. Comp sales were 0.4% and operating income declined 10.9%. Brewer told the media that the turnaround plan includes more services, an expansion of its generic prescription savings, loans for micro businesses and more convenience with a new mobile check-in for online orders that are picked up in the clubs.
On a positive note, Brewer said consumers are responding to the club’s expanded services. Sam’s grew its Plus membership by 7.4% in the last quarter. Plus membership is $100 a year, with 16 “add-on” memberships at $45 each.
FREE, 4 & 10
Brewer said Sam’s Club aims to be a destination for health and wellness for its growing member base.
She said Sam’s Club unveiled in February a generic prescription plan for its Plus members called “Free, 4 & 10.” The free drugs are available in 35 states including Arkansas. Neighboring Oklahoma however, is among 13 states that have state laws prohibiting free prescriptions. The $4 and $10 prescriptions are available in all states.
“Free, 4 & 10” provides Plus members with access to five generic drugs used to treat diabetes, Alzheimers, mental, prostate and women’s health for free:
• Donepezil for Alzheimers;
• Pioglitazone for diabetes;
• Finasteride for prostate;
• Escitalopram for depression, anxiety; and
• Vitamin D 50,000IU for osteoporosis.
Brewer said the five free drugs were not chosen randomly, but selected from member feedback.
“Our members told us they need help with health care issues. We continue to look for ways to offer more in this area because we know if we get this right our members will return again and again. It’s the reason Sam’s Club Pharmacy received the top ranking among all mass market retailers last year,” she told shareholders on Friday (June 5).
Aside from the five drugs above, the program also provides Plus and Business members access to more than 200 generic drugs for $4 in specified quantities as well as more than 400 generic prescription drugs are available for $10.
Elaine Webb, a Plus member at Sam’s Club No. 8243 in Raymore, Mo., was paying $130 cash every month for her prescription, according to Brewer. Webb asked her doctor to prescribe another drug, but her doctor told her it was the only one in that class. Webb was encouraged to shop around for a better price.
“When she came to her Sam’s Club to renew her membership Elaine (Webb) upgraded to a Plus member and found out her prescription would be free. That’s a savings of $1,500 in one year for this family,” Brewer told shareholders on Friday (June 5).
SMALL BUSINESS LOANS
Brewer reiterated the importance of service to micro businesses for Sam’s Club. She said “micro businesses” with less than 10 employees from bakers to caterers to daycare owners have been some of the slowest to recover through the deep economic downturn seven years ago.
“Many have been hesitant to take out a loan, but I can tell these micro businesses are much smarter today having gone through such a lengthy recovery,” Brewer said.
Sam’s Club has launched its Business Lending Center which provides access to capital for small business owners. The Center connects business members to responsible lenders and credit options – up to $350,000 – through Lending Club, SmartBiz and Sam’s Club Business MasterCard. Brewer said Sam’s Club invested $13 million into these agencies that can be loaned to qualifying members.
“Sometimes a small business may need $25,000 or even a $1,500 loan for their business but these are not always easy to get. Our investment should help,” she said.
Lending Club provides access to peer-to-peer business loans and SmartBiz provides access to 7(a) SBA Loans. The Business Lending Center also increases business access to cash flow through the Sam’s Club Business MasterCard. Members using the Business Lending Center will receive exclusive savings of 20% on loan-related fees.
Brewer said Sam’s Club members like the Click & Pull option that allows small businesses to order online before midnight and then pick up the items in-club the following day. She said the club also has extended its 7 a.m. opening hours to accommodate micro businesses that shop every day.
She said the online order service is now called Club Pickup.
“They also told us we could be better so our digital team has now given them access to an easier check-in process via our new Mobile Check-in application launched this week,” Brewer said on June 4.
Each club has a kiosk check-in set up near the club entrance. But the check-in process begins prior to that. When a member places their online order there is a response option prompt that they are asked to activate when they are headed to the club for pickup. Once that alert is sent from the member that they are leaving for the store, local club workers retrieve that order.
Once the member enters the parking lot and trips the geo-fence, the club worker then heads to the front of the store toward the kiosk check-in area. The member scans the QR code from their phone or signs in by name and their order should be there simultaneously or within 60 seconds.
Brewer said this mobile check-in helps members save time which is a valuable commodity for small business owners. Because the order also is paid online, it allows business owners to send one of their workers to collect the order.