Sam’s Club opens to fanfare

Ø $31,000 donated to Norman

charities, schools and public service

organizations

By Randall Turk

Transcript Business Editor

With jumbo check giveaways and deafening chants from pumped up employees, Sam’s Club opened officially to shoppers on January 29.

The company’s charitable foundation, flush with donations from Sam’s Club employees and the corporation, wrote $1,000 checks presented to 31 Norman charities, schools and public service organizations.

Sam’s Club brass, officials from the City of Norman and the Norman Chamber of Commerce had nice things to say about the 135,000-square-foot store’s potential for sweetening city revenues, increasing charity work and aiding small businesses in the area. All Sam’s Club stores make substantial annual contributions to their communities, a Sam’s Club press release mentioned.

“We’re thankful for having a Sam’s Club in Norman, and for the company’s generosity to our community and revenues to the city,” said Mayor Harold Haralson.

Sam’s Club was built on the former Wal-Mart site at 3400 W. Main St. For 20 months before the former Wal-Mart store was razed to build the new Sam’s Club, part of the building was occupied by Journey Church. “Over that 20 months, Wal-Mart donated over $1 million to help people,” said Journey Pastor Clark Mitchell.

“We’re always concerned about a vacant building in Norman,” said Ward 3 Councilman Jonathan Leavey, who thanked Mitchell and Wal-Mart for putting the building to good use. “Sam’s is bringing 160 jobs and sales taxes to help us fix our streets,” Leavey said.

Haralson and Leavey both expressed gratitude for “no longer having to drive to Midwest City” to shop at Sam’s Club. (The company’s first Sam’s Club opened in Midwest City in 1983.)

In a conversation with The Transcript, Sam’s Club Executive Vice President Doug McMillan said his company has about 50 new stores in various stages of completion. Sam’s already has 550 clubs operating in the U.S. and 91 abroad.

“The market dictates where we put our stores,” McMillan said. “This Sam’s will draw from Moore, Norman and areas south. We count almost 19,000 small businesses in the Norman area.”

Among the enterprises buying from Sam’s Club are restaurants, convenience stores, offices, churches, beauty/barber shops, daycare centers, schools, vending machine companies, hotels/motels, contractors and maintenance and repair shops.

Sam’s Club stores sell to both small businesses and consumers. The mix is about 40 percent business and 60 percent individuals, McMillan said. All buyers must purchase Sam’s Club membership cards, currently costing $30 for businesses and $35 for individuals. Both consumer categories pay the same price for merchandise.

Bill Senn, the company’s division sales manager, said there are now 107 Sam’s Club in seven Southern states, including eight in Oklahoma. “We’ll open 25 new stores over the next year throughout the country, but none of those will be in Oklahoma,” he said.

Sam’s Clubs offer competitive prices and convenience to businesses, Senn said. “While a Wal-Mart carries 100,000 to 120,000 SKUs (line items) a Sam’s carries only 4,000. We sell more items in bulk.”

Sam’s Club and Wal-Mart stores have endured withering criticism from some small businesses, primarily food and office supply companies, for undercutting their costs and stifling local competition. “We can sell to them and compete with them for business,” Senn said. “Some of them have vendors that sell at prices lower than ours.”

“Many of our competitors utilize middlemen for delivery,” McMillan said. “We don’t. What we offer is convenience through fax and computer ordering. We don’t offer delivery, but we save you time.”

McMillan, 38, has risen quickly through the Sam’s Club ranks since his high school days, when he unloaded trucks in Bentonville, Ark., the corporate headquarters for Wal-Mart and Sam’s Club. He became a full-time Sam’s associate immediately after graduating with an MBA degree in finance from the University of Tulsa.

McMillan said Sam’s Club revenues cover the cost of merchandise and store overhead. “Our profit comes from membership cards,” he said.

Each Sam’s Club store is expected to generate 80,000 to 100,000 members from the area it serves, he said. If such is the case, the Norman Sam’s Club will generate net profits of about $3 million a year.