---
title: "The Warehouse Club Trend and Walmart Sam's Club Anxiety"
description: "Facing the impact of innovative retail formats such as community group buying and pressure from declining performance, traditional supermarkets have shown unprecedented determination to reform. Warehouse membership clubs seem to be becoming a new weapon for traditional supermarkets to cope with the new round of impact, with many companies entering the field, causing anxiety for Walmart's Sam's Club, which has been in China for 26 years but has only opened over 30 stores."
author: "祖龙"
publisher: "New Distribution"
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published: "2021-08-14"
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# The Warehouse Club Trend and Walmart Sam's Club Anxiety

> Facing the impact of innovative retail formats such as community group buying and pressure from declining performance, traditional supermarkets have shown unprecedented determination to reform. Warehouse membership clubs seem to be becoming a new weapon for traditional supermarkets to cope with the new round of impact, with many companies entering the field, causing anxiety for Walmart's Sam's Club, which has been in China for 26 years but has only opened over 30 stores.

**Click to read the original text for details**
Source: Retail Circle (ID: retailsphere) Author: Zu Long
Facing the impact of innovative retail formats such as community group buying and pressure from declining performance, traditional supermarkets have shown unprecedented determination to reform.
Just as in the past, when facing the impact of new retail led by Hema, many traditional supermarkets spent heavily to integrate online and offline, doing O2O, and partnering with JD Daojia, Meituan, Ele.me, etc., for home delivery services. Warehouse membership clubs seem to be becoming a new weapon for traditional supermarkets to cope with the new round of impact, with many companies entering the field.
We know well the local warehouse club pioneer Hema, foreign brands like COSTCO, Walmart's Sam's Club, Metro PLUS membership stores, and Carrefour membership stores. Of course, there are also industry newcomers like fudi, and traditional supermarkets transforming into warehouse clubs, such as Yonghui, Beijing Hualian, Beiguo Supermarket, etc.
This has made Walmart's Sam's Club, which has been in China for 26 years but has only opened over 30 stores, very anxious.
Recently, it announced the establishment of city center stores, penetrating urban network layout, and there are also rumors of settling in lower-tier markets, giving a sense of making a big push.
**Sam's "Attacks" Hema Headquarters**
Regarding Walmart Sam's Club's anxiety, we have to start with a Weibo post. On August 4, Lu Shihan, a Weibo-certified internet tech blogger, posted a Weibo message. The gist was that Walmart Sam's Club was doing ground promotion, placing their promotional tables directly at Hema's headquarters.
Although the Weibo post itself did not make it to the hot search, it attracted a lot of attention in the retail circle. Because Sam's claims its largest flagship store in Asia will open in Shanghai, and the Hema headquarters where the ground promotion took place is "80 mu" away from the Sam's store about to open.
Some netizens who like to joke directly said this was a business war between Sam's and Hema. As the first local retail brand to try warehouse clubs, Hema has already laid out four stores nationwide, with the fourth settling in Suzhou. In Shanghai, it will open 10 stores by the end of this year.
Sam's "doorstep provocation" also prompted Hema President Hou Yi to respond from afar. On August 6, near midnight, Hema President Hou Yi posted a status: "This year in Shanghai, Hema X Membership Store will fully surpass Sams." Below the status, there was a link to "Running to Hema's doorstep to grab members! Sam's has been holding this breath for three years."
**Who is Better: Sam's or Hema?**
One is an old warehouse club backed by Walmart, the other is a new retail leader backed by Alibaba. Both are backed by Fortune 500 companies.
In the recently released Fortune 500 rankings, Walmart ranked first for the eighth consecutive year with revenue of $559.151 billion. Alibaba ranked 63rd with revenue of $105.865 billion.
Let's look at the comments on that Weibo post.
The second hottest comment was: "Sam's portion sizes don't fit China's national conditions. The generation born under the one-child policy can't finish so much food. Our family now prefers small packages when shopping at supermarkets." Of course, the subsequent replies basically exposed the problems in Sam's product localization.
When I was doing procurement 10 years ago, I remember P&G's business constantly instilled in us the concept that large packages and family packs are more favorable and cost-effective. But now it seems this concept may have to change, otherwise it won't adapt to consumer demand. This may be a problem foreign companies, especially American companies, face in the localization process.
There was another comment worth pondering: "If there were Pangdonglai, what would these two companies have to do?" Of course, someone immediately followed up: "Pangdonglai's model determines that it cannot expand on a large scale." Let's not discuss who is the most powerful or whose model is more advanced among Hema, Walmart, and Pangdonglai.
But from this comment, we must and should think about the issue of "service" in the retail industry. In a narrow sense, the product is the product itself, but in a broad sense, the product should be "product + service."
For warehouse clubs, this is even more so. Members pay membership fees and should enjoy exclusive member services and rights; otherwise, what's the difference from shopping at a regular supermarket?
This is not a question of who is better between Hema and Walmart Sam's, but whose member services are better.
This is a question left for all warehouse club companies. While differentiating products, member rights and member services are the core of competition.
In addition to this, foreign companies also have an important issue: localization. Many foreign companies have been shouting localization, but after many years, they still carry the arrogance of foreign companies in their bones.
**Sam's Anxiety**
If we talk about numbers, Sam's is definitely the "big brother" of warehouse clubs. But if we look at the average number of stores opened per year, Sam's is the "snail" of warehouse clubs.
In nearly 25 years in China, Sam's Club has opened over 30 stores. It wasn't until 2021 that Sam's officially began to indicate "acceleration," behind which is Sam's anxiety about many players entering the warehouse club track.
The local warehouse club pioneer Hema and foreign brand COSTCO are the fastest movers, racing to expand across the country. Compared to COSTCO, which is confined to South China and East China, Hema is blooming nationwide, casting a wide net.
The old warehouse club Metro has already opened two stores in Beijing and Chengdu in the form of Metro PLUS membership stores. Carrefour has confirmed that its first membership store in China will be in Shanghai and will open soon.
As a warehouse club with the "big brother" halo but slow development, we can imagine this anxiety. On the one hand, it is affected by the parent company Walmart's development setbacks in China; on the other hand, its own slow development amplifies this anxiety infinitely.
From 2016 to 2020, over five years, Sam's store count in China increased from 15 to 31, growing at an average of 3 new stores per year.
**Sam's Club Store Count in Recent Years**
**#**| **Year**| **Store Count**
1| 2016| 15
2| 2017| 19
3| 2018| 23
4| 2019| 26
5| 2020| 31
Although Walmart is still the world's largest Fortune 500 company, in China it has been closing stores year after year, taking a path of strategic contraction. According to the "2020 China Supermarket Top 100" released by the China Chain Store & Franchise Association in July 2021, Walmart has fallen out of the top three in the national top 100, ranking fourth, its worst ranking since entering China.
**Walmart's Store Closures in Recent Years**
**#**| **Year**| **Store Count**
1| 2016| 13
2| 2017| 24
3| 2018| 21
4| 2019| 15
5| 2020| 10
According to incomplete statistics, as of June 2021, Walmart's store closures in China have accelerated, with closures reaching 9 stores. At this pace, the total number of closures this year should be in the double digits.
For Sam's, in recent external reports, it has begun to test city center stores and enter lower-tier markets such as Fuzhou and Xi'an, showing its eagerness to expand and anxiety about the competitive environment.
In the Chinese market, Sam's competitors are not only Hema, but local Chinese companies represented by Hema are gradually surpassing Sam's with localized approaches and a better understanding of consumers.
Sam's is Walmart's trump card in the Chinese retail market and the last face of the Fortune 500 in China.
 _-END-_
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