Sam’s opens its ‘Portfolio’ to a health-and-wellness focus
BENTONVILLE, Ark. — Sam’s Club promises to be an even more formidable competitor in the health-and-wellness space in the years ahead, judging from the strategic priorities now in place as part of a broad-based strategy known as Project Portfolio.
Not to be confused with Walmart’s Project Impact strategy, despite the abundant similarities, Sam’s Project Portfolio approach has as one of its key elements an increased focus on health and wellness. Space devoted to those categories, as well as to food, is being expanded as clubs are remodeled. Unchanged in the new Project Portfolio merchandise layout is the prominent position of the health-and-wellness area at the front of clubs.
The changes are occurring under the leadership of president and CEO Brian Cornell, who joined the retailer a little less than two years ago and quickly embarked on a strategy to expand space and improve the productivity of frequently shopped categories while reducing exposure to such less-attractive growth areas as large appliances and hardlines.
By the end of the current year, Sam’s expected to have 100 of its approximately 600 clubs in the Project Portfolio format, which Cornell contended improves sight lines and clarity, and results in sales improvement in focus categories. As evidence of the strategy’s success, Cornell highlighted the 2.4% increase in same-store sales Sam’s produced in the third quarter.
During the coming year, Sam’s expects about $700 million of its approximately $1 billion capital budget will be used to remodel 60 to 70 clubs, with an additional $300 million spent on the new construction or the relocation and expansion of seven to 12 clubs.
The emphasis on food and health and wellness in the Project Portfolio strategy is understandable given the growth characteristics, frequent replenishment cycle and a margin profile that enables Sam’s to demonstrate value. Also playing a factor is the background of the executives now leading the company. Cornell joined Sam’s in March 2009, after serving as president and CEO of Michael’s for two years. However, his more relevant experience was obtained in the supermarket and consumer packaged goods world. He arrived at Michael’s from Safeway, where he served as chief marketing officer, and prior to that he held senior management positions with PepsiCo and Tropicana.
A month after Cornell’s arrival, Sam’s named Linda Hefner as EVP merchandising. She joined Walmart in 2007 as a merchandising EVP to lead the home business. Hefner came to Walmart from Kraft Foods, where she served as EVP global strategy and business development, and prior to that was a senior executive with Hanes, which at the time was a division of Sara Lee.
In August, Sam’s appointed Todd Harbaugh EVP operations. He is a 20-year veteran of Walmart who spent the past seven years at Sam’s, where prior to his current position he served as SVP inventory management, supply chain, pricing, planning and execution.
Changing Channels — Hot products outside of food, drug and mass
NEW YORK — Sagging, the practice of letting one’s pants hang slightly below the waist in a way that exposes the underwear, is a fashion trend that has inspired heated debate of a sort unseen since the mink stole, pitting supporters of free expression against those who see it as indecent exposure. Like fur, it likely will stick around for some time, so inventor Andrew Lewis has taken the pragmatic route with Subs, launched by Hatch Ventures. Subs work like suspenders or garters, holding pants up so that they don’t fall down too low and inhibit wearers’ ability to walk and climb stairs. Subs retail for around $34.95, and products also come packaged in kits.
BOYNTON BEACH, Fla. — It may be stay- indoors season now, but spring will arrive in a few months, bringing Americans out for camping, fishing and other outdoor activities. United Spirit of America has unveiled Basic Edition, a line of personal care products designed for outdoor enthusiasts, military and law-enforcement personnel. The products make personal care easy while delivering protection against sun exposure, insects and germs. Products include a combination shampoo, body wash and shaving lather; a sunscreen spray that also acts as an insect repellant; anti-fungal foot powder; and anti-bacterial gel. Prices range from $1.99 for the antibacterial gel to $8.99 for the foot powder.
SAN ANTONIO — It’s common for parents washing babies’ cloth diapers to end up with an un- pleasant ammo- nia smell, but Texas-based Rockin’ Green has created a way to get rid of the scent. Funk Rock is designed to eliminate the ammonia smell that emanates from cloth diapers in half an hour or less. The product uses a natural ammonia-busting compound that eliminates odors with a few tablespoons. Funk Rock also works on odors from pets’ urine. It is available in 9-oz., one-month supplies for $12.95.
NEW YORK — It’s hard to convince most small children that medicine will help them when it tastes positively vile, but one doctor who encountered this dilemma with his two small children created Sippy Sure, a sippy cup that mixes medicine with more palatable beverages. The cup, launched by Iatrical Innovations, works by keeping the medicine and the beverage separate, but mixing them together when a child drinks from it in a way that will administer the medicine without the child detecting it. The cup retails for $8.99.
Dollar General raises guidance after strong Q3
GOODLETTSVILLE, Tenn. — Dollar General reported that its third-quarter net income was $128 million, or a diluted earnings per share of 37 cents.
Excluding a net loss of $8 million ($5 million after income taxes) relating to the early repayment of certain long-term obligations, net income for the 2010 third quarter was $133 million, or a diluted EPS of 39 cents, a 76% increase over net income of $76 million, or 24 cents per diluted share, in the third quarter of fiscal 2009.
The boost prompted the company to raise its full-year adjusted earnings per share guidance to the range of $1.78 to $1.81, Rick Dreiling, chairman and CEO said.
Net sales for the quarter increased 10.1% to $3.22 billion in third quarter 2010, compared with $2.93 billion in the year-ago period. Same-store sales increased 4.2% in the 2010 quarter and 9.2% in the 2009 quarter, with customer traffic and average transaction amounts contributing to the same-store sales increases in both periods.