Sam’s Club CEO Rosalind Brewer on Friday (Oct. 2) announced broad personnel and strategy changes that include nine top level organizational moves for the club division of Wal-Mart Stores Inc. The Sam’s Club news came on the same day that Wal-Mart announced 450 job cuts at the home office in Bentonville.
The big changes are not a surprise. In early June, Brewer told the media that she and other execs in the division were focused on more “newness” in the 650 clubs across the country. At that time, changes Brewer noted included taking risks with technology offerings, deeper discounts on high-dollar items, more organic foods and more fresh food. The changes are in hopes of improving the lackluster financial performance that has labeled it the laggard in Wal-Mart’s retail portfolio. Sam’s Club delivered in the first fiscal quarter a 0.4% comp excluding fuel, and 3.8% comp decline including fuel.
In a memo sent to Sam’s Club employees Friday morning, Brewer said the changes are the result of a nine month analysis to find “a winning path for the future of Sam’s Club.”
“This is the first of a series of communications in which I’ll explain our strategy. As you’ll see, rather than set off in new directions, we intend to evolve and focus our strategy to build sustainable growth,” Brewer noted.
Brewer said the four “key elements” of the new focus are:
• Grow with higher household-income members and four high-value business segments;
• Drive relevant merchandise and deliver better value for our members;
• Acquire and retain the right members in the club and increase their spend, and
• Transform the club experience with digital.
New positions were created and job shifts are being made to deliver on the new focus.
Seong Ohm is moving from senior vice president-merchandise business services to senior vice president merchandise solutions.
Todd Matherly is moving from senior vice president-merchandising solutions to senior vice president-business member merchandising. This is a new position within Sam’s Club
Jason Shaw is moving from vice president-merchandise transformation to vice president-category management. This is a new position designed to “deliver the analytical horsepower” needed by Sam’s Club to made better decisions about merchandise, Brewer said.
George Agnacian is moving from vice president-proprietary brands to vice president-Sam’s Club global leverage.
Greg Cathey is moving from vice president-Sam’s Club global leverage to vice president-regional buying, food and beverage. This is a new position within Sam’s Club.
Chandra Holt was named the vice president-proprietary brands. She previously worked for Walgreens where she was responsible for candy, grocery and fresh food. She also has 10 years experience with Target.
Russell Mounce was promoted to vice president-produce. This is a new position within Sam’s Club.
MiKaela Wardlaw Lemmon and Alex Aguila will change reporting from merchandising to membership.
“Moving forward, we’ll be developing a broader, integrated private label strategy that will sit above the category level. We intend to build fewer, much stronger private label brands,” Brewer said of the focus on merchandise.
She said the company’s “merchandise talent” must improve to reach club customers.
A key part of the new focus is to better connect merchandise to the club’s customers. Following are the four “primary categories” of club customers listed by Brewer.
• Large families: with children from ages six to 18
• Neighbor families: those who live within two to three miles of a Sam’s Club and treat our clubs almost like a grocery store
• New Moms: who spend heavily on diapers, wipes, baby food, and have the potential to become very loyal members
• Social couples: empty nesters and millennials who like to entertain
Among business members, the company also has four key areas.
• Restaurant/food services (small restaurants, bakeries, pizza shops, food trucks)
• Care Groups (day care centers, churches, school organizations)
• Service industries (doctor and lawyer offices, accountants, small offices)
• Convenience store owners
Brewer also said the company will continue to expand and improve the use of digital technology to make it “easier for our members to shop in and out of the club.”
In her note, Brewer also said Sam’s Club corporate jobs were among those announced by Wal-Mart Stores.
“Our strategy work has coincided with the company’s initiative to improve overhead efficiency, creating a simpler, more effective workplace. Sam’s Club will be reducing layers of management, impacting a small number of associates. These are difficult decisions, and we know the impact this can have on associates and their families. These are our fellow associates and friends, and we will ensure they are treated well,” Brewer wrote.