Wal-Mart Stores Inc., the world’s largest retailer, will eliminate more than 10,000 jobs at its Sam’s Club
Wal-Mart Stores Inc., the world’s largest retailer, will eliminate more than 10,000 jobs at its Sam’s Club membership warehouse stores because it has hired an outside firm to conduct the in-store demonstrations and product sampling previously performed by these workers.
Sam’s Club President and Chief Executive Brian Cornell said in a memo today that the company has hired Shopper Events, a marketing firm based in Rogers, Ark., to take over demonstrations to “take this member experience to the next level.” The mostly part-time Sam’s Club employees who will lose their jobs will have the opportunity to apply for positions with the new firm, he wrote.
The retailer also will eliminate about 1,200 jobs in membership recruiting, or about two positions at each of its domestic warehouse clubs.
The cuts come as Wal-Mart announced earlier this month that it would close 10 underperforming Sam’s Club stores in the United States and lay off about 1,500 workers. Stores in LaQuinta, Vista, Irvine and Sacramento are among those to be shuttered. Sam’s Club, a division of Bentonville, Ark.-based Wal-Mart, operates about 600 U.S. stores. The chain also has locations in Brazil, China, Mexico and Puerto Rico.
Burt P. Flickinger III, managing director of Strategic Resource Group, a retail consulting firm, said the wholesale club has tried desperately to shore up sales, offering discounted memberships during the summer and to students. But Wal-Mart’s warehouse club continues to play second fiddle to rivals like Costco Wholesale Corp., whose high-performing stores can bring in $150 million to $250 million a year in annual revenue, about five times that of Sam’s Clubs in the same market, he said.
“Wal-Mart in copying from others – in this case, with Sam’s Club – is not nearly as good as it was in innovating with discount stores,” Flickinger said.
Cornell noted that Shopper Events has a relationship with the parent company. It manages the “Bright Ideas” in-store demonstrations in domestic Wal-Mart stores, and will be developing a program for Sam’s Club called “Tastes and Tips” with the goal of highlighting its food and beverage and wellness products, as well as its electronics.
“We do not make these decisions lightly and know this is a difficult development for the members of our Sam’s club family who will be leaving the company,” Cornell wrote in a memo to employees.
Wal-Mart would not make executives available for comment, beyond making available a copy of Cornell’s memo.