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Walmart's (WMT) Sam's Club Takes Minimum Wage Up to $15
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Several retailers have taken to raising their wages in a bid to attract and retain workers in the tough labor market. Walmart Inc.’s (WMT - Free Report) Sam’s Club is one such name, which is hiking its minimum wage to $15 per hour, from Sep 25, per media reports. The membership-based warehouse club apparently stated that more than 34% of its hourly workers will get a wage bump. This includes various roles, such as forklift drivers, personal shoppers and team leads, among others.
Industry experts believe this move will help Sam’s Club stay firm amid retailers like Target (TGT - Free Report) and Costco (COST - Free Report) . While Target already pays $15 as the minimum wage, Costco had increased its starting wage to $16 earlier this year. Earlier this month, sources revealed that even Walmart is raising its minimum wage from $11 to $12, also effective Sep 25.
Walmart and Sam’s Club’s above-mentioned wage increase due to the tight and competitive labor market appears to be a prudent step ahead of the major holiday season. The holiday season is an important selling period for retailers, which accounts for a chunk of their annual sales. Retailers remain focused on making every possible effort to make the most of this busy selling period, including undertaking online and offline growth strategies. Early store openings, replenished assortments, attractive bargains (both in stores and online) along with upgraded apps are some of the actions many retailers take to make the most of the crucial holiday opportunity.
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Apart from this, companies take to additional hiring and raising wages to ensure adequate workforce for a smooth holiday experience. Talking of hiring, earlier this month, Walmart unveiled plans to hire 20,000 workers at more than 250 Walmart and Sam’s Club distribution centers, fulfillment centers and transportation offices. Kohl's Corporation (KSS - Free Report) also revealed on Sep 13 that it intends to recruit nearly 90,000 seasonal workers to cater well to the high demand during this busy shopping period. Other retailers like DICK’S Sporting Goods and Ollie’s Bargain also announced hiring plans ahead of the crucial holiday season.
Coming back to Walmart’s Sam’s Club, it witnessed a net sales rise of 13.9% to $18.6 billion in the second quarter of fiscal 2022, forming more than 12% of Walmart’s total revenues. Sam’s Club comp sales, excluding fuel, grew 7.7%. While transactions increased 5.1%, average ticket rose 2.5%. Gains from government stimulus also boosted comp sales. Comp sales saw broad-based strength across categories, mainly led by food. However, these were partially hurt by lower tobacco sales. Membership income climbed 12.2% in the quarter, with the total member count being at an all-time high. E-commerce fueled comp sales by 180 basis points (bps). E-commerce sales jumped 27% at Sam’s Club on a robust direct-to-home show and a solid curbside performance.
The aforementioned wage hike is likely to help Sam’s Club and Walmart strengthen their team of workers, and stay well placed especially before the significant holiday selling period. Walmart, currently carrying a Zacks Rank #2 (Buy), has seen its shares gain 9.4% in the past six months compared with the industry’s rise of 10.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Walmart's (WMT) Sam's Club Takes Minimum Wage Up to $15
Several retailers have taken to raising their wages in a bid to attract and retain workers in the tough labor market. Walmart Inc.’s (WMT - Free Report) Sam’s Club is one such name, which is hiking its minimum wage to $15 per hour, from Sep 25, per media reports. The membership-based warehouse club apparently stated that more than 34% of its hourly workers will get a wage bump. This includes various roles, such as forklift drivers, personal shoppers and team leads, among others.
Industry experts believe this move will help Sam’s Club stay firm amid retailers like Target (TGT - Free Report) and Costco (COST - Free Report) . While Target already pays $15 as the minimum wage, Costco had increased its starting wage to $16 earlier this year. Earlier this month, sources revealed that even Walmart is raising its minimum wage from $11 to $12, also effective Sep 25.
Walmart and Sam’s Club’s above-mentioned wage increase due to the tight and competitive labor market appears to be a prudent step ahead of the major holiday season. The holiday season is an important selling period for retailers, which accounts for a chunk of their annual sales. Retailers remain focused on making every possible effort to make the most of this busy selling period, including undertaking online and offline growth strategies. Early store openings, replenished assortments, attractive bargains (both in stores and online) along with upgraded apps are some of the actions many retailers take to make the most of the crucial holiday opportunity.
Image Source: Zacks Investment Research
Apart from this, companies take to additional hiring and raising wages to ensure adequate workforce for a smooth holiday experience. Talking of hiring, earlier this month, Walmart unveiled plans to hire 20,000 workers at more than 250 Walmart and Sam’s Club distribution centers, fulfillment centers and transportation offices. Kohl's Corporation (KSS - Free Report) also revealed on Sep 13 that it intends to recruit nearly 90,000 seasonal workers to cater well to the high demand during this busy shopping period. Other retailers like DICK’S Sporting Goods and Ollie’s Bargain also announced hiring plans ahead of the crucial holiday season.
Coming back to Walmart’s Sam’s Club, it witnessed a net sales rise of 13.9% to $18.6 billion in the second quarter of fiscal 2022, forming more than 12% of Walmart’s total revenues. Sam’s Club comp sales, excluding fuel, grew 7.7%. While transactions increased 5.1%, average ticket rose 2.5%. Gains from government stimulus also boosted comp sales. Comp sales saw broad-based strength across categories, mainly led by food. However, these were partially hurt by lower tobacco sales. Membership income climbed 12.2% in the quarter, with the total member count being at an all-time high. E-commerce fueled comp sales by 180 basis points (bps). E-commerce sales jumped 27% at Sam’s Club on a robust direct-to-home show and a solid curbside performance.
The aforementioned wage hike is likely to help Sam’s Club and Walmart strengthen their team of workers, and stay well placed especially before the significant holiday selling period. Walmart, currently carrying a Zacks Rank #2 (Buy), has seen its shares gain 9.4% in the past six months compared with the industry’s rise of 10.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.