Now, I know that technically this isn’t all about Costco, but this is about their biggest warehouse competitor, so I thought I should share it.
Walmart has decided that there are ten Sam’s Club locations around the country that aren’t performing up to their financial standards since they continue to lose money. So, Walmart will be closing these under-performing stores. The closures will happen in the following locations: Nampa, ID; La Quinta, CA; Louisville, CO; Vista, CA; Rolling Meadows, IL; Clay, NY; Irvine, CA; and in the Houston, TX, Phoenix, AZ, and Sacramento, CA markets. Despite these closures, Sam’s Club will be opening 11 – 16 new locations by the end fiscal year 2011, while remodeling more than 100 existing locations.
As a result of these closures, 1,500 employees will also be affected; they will either have to find a new job or deal with a job transfer. Some employees will be given a severance package, but others will be offered positions at other Sam’s Club or Walmart locations. They also plan on holding job fairs to help employees learn about new job opportunities.
So, now I’m wondering if these areas are just not good for warehouse stores, or if it was something about Sam’s Club in particular. Is Costco already in these areas? Well, when I checked on the Costco.com website, it was easy to see that they are in all but one of the affected areas. This leads me to believe that there’s something about the Sam’s Club stores and business model that was the problem, because obviously these areas will support warehouse shopping. Of course, it could be that the shoppers in these areas want higher quality items, like those sold at Costco, rather than the budget items that are typically sold at Sam’s Club. Though, it does appear that in some of these areas there were multiple Sam’s Club locations, of course it is hard to tell with their location search tool how close the additional locations are since they do not indicate mileage and restrict you to a 50 mile search radius. However, here’s a list of the Costco locations that are in the same areas at the soon to be closing Sam’s Clubs, so if you’re a Sam’s Club shopper from one of these areas, you’ve got a shopping alternative. Costco doesn’t have a location in Clay, NY, but they have at least one location in all of the other areas: