“Let’s Try Again” series investigates why companies attempt to do something they failed at previously.
Walmart is ramping up growth at Sam’s Club a year after it closed 63 stores and laid off almost 1,000 workers. Our data shows the number of new positions posted at Sam’s Club grew from 84 in April to 2,300+ in May, 3,160+ in June, and almost 4,800 in July. From 26x to 56x the number of new positions than same months last year.
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Almost all this investment is destined for Sam’s Club physical stores. New positions from May to July include:
- 1590+2781 jobs in customer service
- 622+832+1113 in grocery
- 18+98+130 in pharma
- 23+119+124 in opto
- 486+117+103 in merchandising
- 378+477 in fulfillment
None of these new jobs appear to be at new locations. Top 5 cities for new jobs include:
- Dallas, TX (12 stores)
- Las Vegas, NV (6 stores)
- Houston, TX (10 stores)
- San Antonio, TX (6 stores)
- Oklahoma City, OK (8 stores)
We cannot confirm whether this boost is a result of changes in how Sam’s Club HR posts jobs. They may be simply be switching job postings from local job boards to online. They may also be ramping up hiring for the upcoming holiday season, although none of the jobs appear to be seasonal or temporary. It’s nonetheless a clear shift from Walmart’s intentions last year when it closed 63 stores.
Walmart is serious about warehouse retailing.
Costco has not had a decline in YoY growth since 2009. The warehouse giant has grown its upper-middle class, high-spending member base more than 4% a year since 2014. It also boasts a whopping 91% retention rate.
People really enjoy its high quality products, competitive prices, and happy staff (a rarity in retail). This has allowed Costco to grow alongside Amazon: A majority of Costco’s membership base are also Prime members.
Costco’s success is not going unnoticed. Wal-mart would have loved to have the kind of YoY growth Costco has experienced. Especially considering the fact Costco operates as a traditional retailer: through buying/merchandising quality products, advertising with a comparatively miniscule marketing budget through flyers and monthly promotions, and offering everyday value. A formula Wal-mart understands well. Yet Sam’s Club is only expected to grow 1% YoY in 2019 as opposed to Costco at 5%+ YoY.
Wal-mart is clearly waging war on two fronts to win over America’s upper-middle class. Fighting Amazon on one front by investing in omni-channel, growing its e-commerce footprint despite high costs, and building its in-house technology. Then fighting Costco on a second front on providing high quality products at low prices.
Where else can we open warehouses?
Whether this boost in investment into Sam’s Club will result in faster growth will depend on Wal-mart’s ability to offer unique value to consumers. Customers may hold both Prime and Costco memberships, but it’s unlikely they’ll also hold a third Sam’s Club membership.
Much of that unique value will depend on having stores where Costco doesn’t. But how many upper-middle class neighborhoods don’t already have a Costco or Sam’s Club?
About the Data: The Battle of Giants uncovers companies’ growth intentions by using machine learning to transform recruiting data into strategic insights. It’s the difference between knowing a company is hiring 10% more software developers vs. investing 10% more in last-mile delivery. Data may not be all-emcompassing (we only access public recruiting websites), but complement press releases and news articles for a more comprehensive view of a company’s competitive advantage.