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Sam’s Club closing stores in strategy realignment

BY DSN STAFF

Walmart will be closing several of its Sam’s Club stores, the retailer announced Thursday. The company is set to close 63 stores this year, with plans to convert as many as 12 of them to e-commerce fulfillment centers with the aim of speeding up its online order delivery. 

According to company leadership, the closings — which will bring Sam's Club’s store count to 597 clubs — are part of an effort to remain competitive. 

“Transforming our business means managing our real estate portfolio and Walmart needs a strong fleet of Sam’s Clubs that are fit for the future,” said John Furner, president and CEO of Sam’s Club. “We know this is difficult news for our associates and we are working to place as many of them as possible at nearby locations. Our focus today has been on those associates and their communities, and communicating with them.”

Sam's Club said that the first store to be converted into a fulfillment center will be in Memphis, Tenn. Walmart will be providing pay and resources to affected employees, as well as 60 days of pay and severance to those eligible. As part of the company's Thursday announcement to raise wages and improve benefits, as well as offer bonuses to certain eligible employees, eligible Sam's Club employees affected by the closings will be able to claim them, the company said. 

“We need great people to help lead us into the future and we hope that many of them will stay with the company at either a local store or club,” Furner said. “Change is never easy, but we’re making these decisions as part of running a healthy business.”
 

The announcement of the closures and conversions came on the heels of the retirement of Sam’s Club’s senior vice president and GMM of consumables and health and wellness Jill Turner-Mitchael. 

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Sam’s Club’s Turner-Mitchael to retire

BY David Salazar

Sam’s Club senior vice president and GMM of consumable and health and wellness will be retiring at the end of the fiscal year, a Sam’s Club spokesperson confirmed Wednesday. Turner-Mitchael is a 26-year veteran of the company, having joined Walmart in 1992 as a pharmacist in Lubbock, Texas.

During her time at the company, Turner-Mitchael has led various teams at Walmart and Sam’s Club, including Walmart’s pharmacy operations team and Sam’s Club’s merchandising, operations and health and wellness divisions. She has received the Sam M. Walton Blue Coat Award of Excellence.

“Jill leaves a lasting legacy, both as a merchant and as a disruptor in the health care industry,” the company said. “Her passion in raising awareness of health and wellness issues and in testing exciting new concepts in clubs such as free screenings, health kiosks and caregiver support programs has helped the company to become a leader in affordable health care. Jill has also made a strong impact on associates throughout the company with her mentorship and focus on championing women’s advancement in the workplace.”

The company said it has not yet named Turner-Mitchael’s successor and will do so once it has been announced internally.

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Supervalu’s Q3 shows results of acquisitions on wholesale business

BY David Salazar

Grocery retailer and wholesaler Supervalu has shared the results from its fiscal 2018 third-quarter, which included a boon to its wholesale business in the form of its Unified Grocers acquisition, even as retail sales declined. The Minneapolis-based company’s total continuing operations saw net sales of $3.94 billion — up 31% from $3 billion in the same period last year.

Supervalu’s retail division netted $1.02 billion in sales, down 4.1% from last year’s $1.06 billion, which the company attributed to a 3.5% dip in same-store sales and store closings, offset by new and acquired store sales. The company’s retail operating loss was $6 million for the quarter, a number that included $3 million in costs related to store closures. Supervalu’s third-quarter operating loss was well below the loss it posted in the same period last year, when it reported $14 million.

The impact of retail losses on Supervalu’s bottom line was buoyed somewhat by its wholesale division’s performance. The wholesale business posted $2.89 billion in net sales, an increase of 52% over the prior period, which the company said was driven by the Unified Grocers acquisition, as well as new customer sales and increased sales to existing customers. Operating earnings were down slightly from last year, coming in at $48 million after being adjusted for $2 million of merger and integration costs. In the prior third quarter, Supervalu’s wholesale division brought in $52 million in operating earnings.

“With the influx of significant new business in certain distribution centers, we experienced a larger-than-anticipated increase in expenses, but we're encouraged by the work we are doing to address those costs and believe they are manageable going forward,” Supervalu president and CEO Mark Gross said. “We remain committed to investing in our wholesale business to drive future growth.”

On the corporate side, Supervalu saw fees earned of $33 billion from services agreements, and its new corporate operating loss was $1 million — which included $3 million of merger and integration cost. This is compared with net corporate operating earnings of $4 million last year.

With the Unified Grocers acquisition completed in Q3, the company set its sights on its Associated Grocers acquisition, closing it early in its fourth quarter.

“We're pleased to have completed our acquisition of AG Florida early in the fourth quarter,” Gross said. “The work done in the third quarter concluded with this deal which, combined with the acquisition of Unified Grocers earlier this fiscal year, demonstrates our commitment to the strategic growth of our Wholesale business. Furthermore, we're extremely pleased with the integration work at Unified and the progress made in that market.”

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