* Increasing space for produce, meat, bakery
* Decreasing space for sporting goods, movies, DVDs
* Sees labor hours in clubs down 6-8 pct in next 5 yrs
* Wal-Mart shares down almost 1 pct
(Adds CEO comment, details on club openings, byline)
By Nicole Maestri
SAN FRANCISCO, Oct 22 Wal-Mart Stores Inc's
(WMT.N) Sam's Club division is shifting its focus from opening
new clubs to remodeling existing ones as it strives to increase
sales, the company said on Thursday.
The No. 2 U.S. warehouse club operator also said it is
testing a new store layout, revamping merchandise to add more
food and drugs, and streamlining operations so it can reduce
labor hours in its clubs 6 percent to 8 percent over the next
"We are absolutely raising the bar on club productivity,
while also focusing on improving that in-club experience,"
Sam's Club Chief Executive Brian Cornell said at Wal-Mart's
Earlier this year, Wal-Mart tapped Cornell, the former
Michaels Stores Inc chief executive, to be the CEO of Sam's
Club. Cornell replaced Doug McMillon, who became president and
CEO of Wal-Mart International on Feb. 1.
Analysts have been waiting to hear how Cornell plans to
increase Sam's Club sales and boost membership. Sam's Club
members pay a fee to shop in its clubs and receive discounts on
goods from computers to jumbo packages of paper towels.
Sam's Club sales fell 3.2 percent to $11.91 billion in
Wal-Mart's second quarter that ended July 31, while sales at
clubs open at least a year, or same-store sales, rose 0.6
NEW STORE LAYOUT
The retailer said on Thursday it will increase space in its
clubs for produce, meat and bakery items, over-the-counter
drugs, and health and beauty-care items. It is cutting space
for large appliances, sporting goods, furniture, movies and
The new store layout being tested also includes a large
center aisle and improved sightlines across the store.
Sam's Club is also adjusting its growth strategy.
"We're shifting our focus from new-store growth to
remodeling our existing base," Cornell said.
The retailer plans to remodel 50 to 55 clubs this fiscal
year, and 70 to 90 next fiscal year. That is up from 21
remodels last year.
Meanwhile, it will open or relocate 15 clubs this year, and
five to 10 clubs next fiscal year. That is a decline from last
year, when it opened or relocated 20 clubs.
While Sam's Club caters to individuals and small business
owners, the retailer said it is increasing its focus on a third
type of member -- the business owner who also shops there for
Sam's has also launched a new program called "eValues,"
which is aimed at getting consumers to sign up for its more
expensive membership. Those that do will then get access to
special coupons to use in-store.
Wal-Mart shares slipped 44 cents , or less than 1 percent,
to $50.19 on the New York Stock Exchange.
(Reporting by Nicole Maestri, editing by Dave Zimmerman and