With the COVID-19 pandemic intensifying globally, consumers are back to consolidating their trips to avoid getting infected and spending their whole paycheck at bulk goods membership clubs Sam’s Club and Costco.
Walmart reported Tuesday that same-store sales at its Sam’s Club warehouse chain surged 11.1% in the third quarter, excluding the impact of falling gas prices at the retailer’s petrol stations. The Street expected an 8% same-store sales gain for Sam’s Club. By comparison, Walmart’s U.S. business saw same-store sales only rose 6.4%. E-commerce sales at Sam’s Club skyrocketed 41% from a year ago.
Membership fee income — which reflects annual dues from members and new signups — gained 10.4%, the highest quarterly growth rate in more than five years. Operating income for the segment rose 30.7% from last year.
How Sam’s Club performed by product category underscores how shoppers’ behaviors have changed during the pandemic. Same-store sales in fresh and frozen food rose by a high-teens percentage in the quarter, grocery was up mid-teens, consumable goods spiked 20% and health and wellness notched a high-teens pop.
The world’s largest retailer called attention to several other interesting trends at Sam’s Club in an online presentation. First, the number of new customers shopping at Sam’s Club improved an eye-popping 28%. And secondarily, the total number of members and renewal rates continued to march higher, Walmart said. It did not disclose specific member count numbers for Sam’s Club.
Sam’s Club operates 600 clubs spanning the U.S. and Puerto Rico.
“The hoarding mindset is not over,” veteran retail executive and JRK Worldwide Enterprise founder Jan Rogers Kniffen told Yahoo Finance on the numbers out of Sam’s Club.
The company’s October same-store sales surged 14.4%. E-commerce sales rose a blistering 91%. Same-store sales in the U.S. increased 13.6%, Canada gained 13.6% and other international rose 19.6%. Costco’s overall same-store sales have gained by mid to high double-digit percentages in the past five months, outpacing trends being seen at rivals Target and Walmart and hinting at market share gains pre-holiday.
“They [Sam’s Club and Costco] have oriented the mix toward stay at home,” Kniffen said. “Costco is the best retailer in the world, and Sam’s Club is steadily improving as a retailer especially in private label.”
The numbers out of Sam’s Club and Costco back all of that up.
Next up in the warehouse space to showcase big third quarter sales gains is BJ’s Wholesale (BJ). The East Coast retailer reports earnings on November 19. It has a ton of momentum into the third quarter. The company’s second quarter same-store sales surged 24.2%, paced by a 300% increase online.
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