San Diego County (for those not living in the West counties are really big here) lost one of its two Sam’s Club this month. It closed last week as one of ten non-profitable stores the company shut down. Yep, out of the 3 million residents here only one store can be profitable.
Four of the ten stores were in California. Interesting yes, surprising no. There are two reasons I think Sam’s Club never caught on here. One is because of the parent corporation and other is due to its competitor.
California managed to stave off Walmart for years until suddenly they seemed to pop up everyone in the past decade. This happened after a lot of NIMBYism. Lately the fight has been mostly against the Walmart Supercenters. The company’s reputation surrounding employee pay and treatment was not good.
According to a NBC San Diego story, “One of the most common criticisms against Wal-Mart is that its new and expanded stores undercut local wages and pressure competitors to scale back their employees’ health care and other benefits.”
Warehouse clubs attract a different demographic than the Walmart stores and that demographic didn’t need Sam’s Club to get good warehouse buys.
A San Diegan, Sol Price, opened the first warehouse store in 1976. Price Club grew and expanded to several locations in the county. Then they merged with Costco in 1993 which had been founded by a protege of Sol Price. Costco now has a dozen stores deeply ingrained in the local culture.
People generally aren’t going to pay for two warehouse memberships. We only went to Sam’s Club when they had a one-day shopping pass promotion or with out-of-towners who had a card. The main benefit was that I could buy a piece of clothing there and know I wouldn’t see others wearing the same thing wherever I went (yes, that’s common in this Costco culture).
So, adios to Sam’s Club. You really didn’t stand a chance, but sorry to see you go.
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