Wal-Mart cuts 11,200 jobs at Sam's Club warehouses

Wal-Mart Stores, the largest retailer in the U.S., is cutting a total of 11,200 jobs at Sam's Club, its membership warehouse division.

Of the jobs being cut by Wal-Mart, the largest retailer in not just the U.S. but also the world, according to Bloomberg and the Los Angeles Times, 10,000 are largely part-time in-store demonstration and product sampling positions and 1,200 are membership recruiting positions. There are currently around 600 Sam's Clubs in the U.S., with the closure of 10 under-performing locations and the loss of another 1,500 jobs being announced earlier in January. Sam's Club currently employs 110,000 staff at its stores, the latest job cuts, revealed at staff meetings on Sunday morning, representing between nine and 10 percent of the workforce. Shopper Events, a marketing firm that, like Wal-Mart, is based in Arkansas, will be taking over the in-store demonstrations and product sampling roles in Sam's Club and it is hoped that many of those losing their jobs with Sam's Club will be able to find new positions with the company that already carries out in-store demonstrations for Wal-Mart. The Associated Press notes that while Walmart stores in the U.S. were posting a 1.2 percent increase in sales during the last quarter Sam's Club outlets were losing close to one percent. Responsible for turning that situation around is Sam's Club CEO Brian Cornell; he told the Associated Press why the decision to hand over in-store demonstrations and product sampling to Shopper Events had been made. He said:

In the club channel, demo sampling events are a very important part of the experience. Shopper Events specializes in this area and they can take our sampling program to the next level

Advising employees in a memo of the decision to dispense with 11,000 plus jobs Mr Cornell, says the Los Angeles Times, explained:

We do not make these decisions lightly and know this is a difficult development for the members of our Sam's club family who will be leaving the company

It is not anticipated that every job shed by Sam's Club will be replaced with one created by Shopper Events but Craig Johnson, president of retail consultancy firm Customer Growth Partners, is apparently one industry expert who believes the effect on the economy will be minimal, noting too that Walmart will continue to be the largest private employer in the world and in the U.S. Stating that "eligible workers" will receive severance pay and benefits, the Associated Press observes that some workers may be able to secure new jobs at Wal-Mart stores or other Sam's Club locations. Each Sam's Club location will be losing approximately two employees within the next 30 days and witnessing Shopper Events introducing a new in-store demonstration program known as "Tastes and Tips". Currently managing in-store demonstrations at Walmart stores in the U.S. under the banner "Bright Ideas" Shopper Events will be looking to improve the profile at Sam's Club warehouses of food and beverage products, wellness products, and electronics. There is no indication that Sam's Club locations in Brazil, China, Mexico and Puerto Rico will be losing any staff. While Sam Walton opened the first Wal-Mart store in Rogers, Arkansas in 1962 - the company is now based in nearby Bentonville, with Shopper Events based in Rogers - Sam's Club did not come in to existence until 1983, opening first in Midwest City, Oklahoma. But various reports describe how Sam's Club struggles to compete with Washington-based Costco in the warehouse club market. Despite the disappointing performance by Sam's Club in recent times the decision to bring Shopper Events on board is supposedly not about cost-cutting, Brian Cornell telling Bloomberg:

The steps we are taking are about differentiation and jumping ahead.

We view it as an investment in building membership loyalty and attracting new members and ultimately fueling growth for Sam’s Club. We expect our members to buy more products and visit us more frequently

Encouraging companies and organizations to offer cut-price membership of Sam's Club to their workers is one of the tactics likely to be employed in an attempt to improve sales.