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Wal-Mart’s Weak Link: Sam’s Club Refocuses To Close Costco Gap

Sam’s Club is strategizing to stay in the race with such rivals as Costco and its own sibling, Wal-Mart Supercenters.

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On its Web site recently, Costco was selling Omega, Raymond Weil and Breitling watches, Perrier Jouet champagne and chrome espresso machines. In its Waltham, Mass.-based store — about half an hour drive from the Natick, Mass. Sam’s Club — Costco had Laundry, Lizwear, Slates and Dockers, Nautica, Tommy Hilfiger, Calvin Klein, Polo, and Op. They had Jay Strongwater jeweled picture frames, Lladro porcelain and Baccarat crystal.

Costco is also clever with its Kirkland private label, which is often co-branded with the manufacturers. Product ranges from Kirkland fridges by Whirlpool to Kirkland jelly beans by Jelly Belly.

Based on anecdotal evidence, Sam’s Club’s Member’s Mark label — launched in 1997 — also has a diverse and growing assortment. The line includes everything from paper towels, anodized cookware sets and dishwasher powder to gas grills, blue jeans and vending machines. Warehouse Club Focus research on Sam’s Club in Mexico noted new private label items as diverse as Member’s Mark chocolate-covered cherries and CD burners.

Whalin said given parent company Wal-Mart’s various operational strengths, what Sam’s Club currently needs is a spicy pinch of creativity. "Wal-Mart has never had to be a terribly creative retailer. And I think, as good as the warehouse business has gotten, that’s exactly where they need to go to compete."
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