WMT - Sam's Club tests online subscription service
- "Sam's Club is testing a new online service called 'My Subscriptions' which allows shoppers to have repeat-purchase items delivered to their homes automatically. The goal of the program is to save customers time by renewing their stash of household and personal care items on an ongoing cycle."
TAKEAWAY FROM HEDGEYE'S BRIAN MCGOUGH:
This is a tough one.
On one hand, we see why Sam's is doing this, and it makes sense -- minimize the time between purchases of essential items.
But on the flip side, the comp at warehouse clubs is driven not just by regular purchases of consumer staples, but by all the discretionary items that consumers buy that they didn't otherwise plan to buy -- simply because they see something interesting at a good price on the shelves.
Simply put, they've got to get people in the stores.
We were similarly perplexed when Wal-Mart started beta-testing its 'curbside pickup' program. You'll recall that's where people order online and pickup at the front of the store. Again, WMT needs to boost traffic and therefore discretionary purchases.