Placer Bites: Sam's Club & Gordmans

Join the Club?

There may be a myriad of reasons why Sam’s Club is rebounding, but the strength should be seen as anything but a given following the company’s precarious situation in early 2018. The company’s Q2 earnings highlighted strong same-store growth, but digging into the data shows that the best may be yet to come. 

Comparing Sam’s Club visits (blue) with those of industry titan Costco (red), show that while still behind in terms of overall visits, the revitalized wholesaler is trending alongside one of the strongest players in retail. 

But the comparison also identifies one of the biggest challenges for Sam’s Club - attracting the right audience. Costco (red) sees a significantly larger portion of their customers in higher-income brackets. 14% of Costco customers earn between $100K and $125K, whereas only 6.9% of Sam’s Club customers do, and the gap continues as the income increases. And this is something the brand is aware of and actively trying to address.

Will it work? Stay tuned.

Gordman Takes Over the Stage

Earlier this month, Stage Stores announced that its entire fleet of stores would be converted to their off-price Gordmans brand. The logic is simple, growth to the off-price brand has grown, as has the wider category, while Stage is experiencing drops in visits. Comparing August 2017 with August 2019, Gordmans has seen an 8.2% increase in visits while Stage saw a 9.6% decrease in the same period. The difference becomes clear in the graph below which measures the performance of Gordmans (blue) and Stage (red) nationally compared to their respective baselines. The gap between the two is growing while Gordmans is able to drive Year-over-Year increases in visits.

While the wide-scale move to off-price locations will inevitably increase traffic, the true question will be whether the growth can maintain itself over time helping Gordmans establish an even stronger position in this growing market.