Sam's Club CEO says seeing some sales weakness from U.S. furlough

ROMEOVILLE, Illinois Thu Oct 3, 2013 5:11pm EDT

The Sam's Club logo is seen at a store in Bentonville, Arkansas on June 2, 2011. REUTERS/Sarah Conard

The Sam's Club logo is seen at a store in Bentonville, Arkansas on June 2, 2011.

Credit: Reuters/Sarah Conard

ROMEOVILLE, Illinois (Reuters) - Sam's Club, the warehouse club chain owned by Wal-Mart Stores Inc (WMT.N), is seeing some softness in sales due to the furlough of federal government employees, though sales in stores near military bases could rise if military commissaries remain closed, Chief Executive Rosalind Brewer said on Thursday.

Even before the U.S. government shutdown began on Tuesday, some Sam's Club locations saw a slowdown during the weekend, as people in the military and civilians in government offices prepared for the possibility of a U.S. shutdown, Brewer said.

"What we're really concerned about right now is what's happening with the furloughs. We're actually seeing a little bit of softness from the government layoffs," Brewer told Reuters as she visited a new Sam's Club location in Romeoville, Illinois.

"In a few clubs it was significant," Brewer said of the drop in business, without giving details on the sales impact or the locations of all of the impacted clubs. She said that Sam's Club initially saw business slow down in the Washington, D.C., and Virginia area.

Sam's Club and other stores located near military bases could see a lift in business as military personnel, retirees and their families who normally patronize commissaries must go elsewhere while the commissaries are closed.

Dozens of commissaries on military bases in the United States, where many military families shop for food and other basic goods at a discount, are now closed.

Sam's Club is offering military families and retirees free access to its stores while the military commissaries remain closed. Typically, members pay an annual fee of $45 or $100 to shop at Sam's Club, which sells everything from food to furniture and had $56.42 billion in revenue last year.

Representatives for the No. 1 warehouse chain, Costco Wholesale Corp (COST.O), and the smaller, privately held BJ's Wholesale Club Inc could not be immediately reached for comment.

(Reporting by Jessica Wohl in Romeoville, Illinois; Editing by Leslie Adler)

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