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Sam's Club Leadership Team
Rosalind Brewer President & CEO Sam’s Club
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Todd Harbaugh,
Charles Redfield
Ann Bordelon
John Boswell
EVP, Operations
EVP, Merchandising
SVP, Finance
SVP, Marketing, Insights & eCommerce
Whitney Head
Ismat Mirza
Mike Turner
Tim Yatsko
SVP, General Counsel & Asset Protection
SVP, People
SVP, Membership
SVP, Replenishment & Planning
Strengthening focus on Member value Everyday Needs
Wow
Simple Solutions
Excitement
Merchandise relevance
In-club efficiency
Member engagement
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Superior value to our Members
Committed to “Savings Made Simple” framework Differentiated Merchandise
Lasting Member Relationships
Superior Value & Growth
Talent & Continuous Innovation
3
Efficient Engaging Experience Anytime Anywhere
Strong 1st half performance Data thru July 31 (excludes fuel) % Growth rates
1H FY13
Net sales
5.8%
Op. inc.
9.3%
4-5-4 Comp
1H FY12 1H FY13
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4.6% 4.7%
Price and quality investments deliver results Fresh meat
+7%
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Dry grocery
+9%
Apparel
Baby care
+12%
+12%
Innovation drives operational efficiency
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In-Club
Logistics
Club wage expense
DC operating expense
% of Sales
% of Sales
Capital Average cost per remodel
Engaging Members through digital platforms Digital sales
Traffic Orders
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Financial scorecard Sales Gross profit rate SG&A as % of sales Membership income Operating income
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Financial priorities – unchanged & aligned 1
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GROWTH
2
LEVERAGE
Superior value through merchandise
Operational productivity
Accelerated growth plan
Leveraging digital
3
RETURNS Membership fee income
Focused on enhancing Member value 4 Enhancing our Membership offering
Lasting Member Relationships
3
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Leveraging eCommerce and digital capabilities
1 Delivering great merchandise
Differentiated Merchandise
Superior Value & Growth
Talent & Continuous Innovation
at a superior value Efficient Engaging Experience Anytime Anywhere
2 Driving club productivity and experience
Focused on enhancing Member value 4
Enhancing our Membership offering
Lasting Member Relationships
3 Leveraging eCommerce and digital capabilities
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Differentiated Merchandise
Superior Value & Growth
Talent & Continuous Innovation
1
Delivering great merchandise at a superior value
Efficient Engaging Experience Anytime Anywhere
2
Driving club productivity and experience
The right merchandise for Members
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Merchandise drives value
Artisan Fresh Rotisserie Chicken
Mighty Pop 50-lb Bag
Assorted Pie Sampler
Sharp 90” LED Television
$4.88
$21.98
$11.98
$9,998
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Delivering what our Members want
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Merchandising strategy drives Member value 1
Pricing
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Relevant and Exciting Merchandise
The #1 reason our Members join is
Price1 Member Ranking
Reasons Why Members Join Sam’s Club??
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Thought prices would be lower than other stores
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Wanted the option to buy in bulk
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Interested/curious about shopping there
General Merchandise Newness and Innovation Differentiated Assortment
Business Member Considerations
Allowing Small Business Owners to: Save Time and Money
Everyday Needs
Wow
Enjoy Sustainable Products Simple Solutions
1. Sam’s Club Demand Landscape (2012), The Cambridge Group Analysis
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3
Excitement
Access Solutions to Make Their Jobs Easier
Focused on enhancing Member value 4
Enhancing our Membership offering
Lasting Member Relationships
3 Leveraging eCommerce and digital capabilities
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Differentiated Merchandise
Superior Value & Growth
Talent & Continuous Innovation
1
Delivering great merchandise at a superior value
Efficient Engaging Experience Anytime Anywhere
2
Driving club productivity and experience
Driving productivity through innovation Self Checkout
Convertible register
Mobile checkout
Tablet register
Step 4
Step 3
Step 2 Step 1
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Member experience and engagement enhanced by innovation “All lanes open all the time” with “assisted checkout”
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Member experience is first class (2012) Rank
Company
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Sam’s Club
2
Publix
3
A Credit Union
4
Chick-fil-A
5
Subway
6
Starbucks
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H.E.B.
8
Winn-Dixie
9
Aldi
10
Sonic Drive-in
“Highest in Customer Satisfaction with Mass Merchandiser Pharmacies” -J.D. Power and Associates
Sam’s Club received the highest numerical score among mass merchandiser pharmacies in the proprietary J.D. Power and Associates 2012 National Pharmacy StudySM. Study based on 12,764 total responses, and measures 11 mass merchandiser pharmacies. Proprietary study results are based on experiences and perceptions of consumers surveyed July-August 2012. Your experiences may vary. Visit jdpower.com
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Focused on enhancing Member value 4
Enhancing our Membership offering
Lasting Member Relationships
3 Leveraging eCommerce and digital capabilities
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Differentiated Merchandise
Superior Value & Growth
Talent & Continuous Innovation
1
Delivering great merchandise at a superior value
Efficient Engaging Experience Anytime Anywhere
2
Driving club productivity and experience
Digital engages more Members, more often Online traffic by device
Traffic growth by device 17%
72%
11%
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Digital integrates club experience, offers expanded access While shopping
Prior to the club
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After shopping
Focused on enhancing Member value 4
Enhancing our Membership offering
Lasting Member Relationships
3 Leveraging eCommerce and digital capabilities
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Differentiated Merchandise
Superior Value & Growth
Talent & Continuous Innovation
1
Delivering great merchandise at a superior value
Efficient Engaging Experience Anytime Anywhere
2
Driving club productivity and experience
Membership trends continue to improve Base Renewals Business signups Upgrades 24
New Membership pilot: testing membership value; fee options New Membership pilot in Texas markets highlighting more for our Members
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Effective in 76 clubs as of Oct. 8th
New Membership pilot: three membership types, fee increase Sam's Plus $100 (no fee change)
Sam's Savings $40 to $45 Sam's Business $35 to $45
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New Membership pilot: more savings for all Members
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New Membership pilot: Plus membership receives cash rewards
$10 cash rewards for every $500 spent 28
Growth, leverage and returns remain financial priorities 1
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GROWTH
2
LEVERAGE
Superior value through merchandise
Operational productivity
Accelerated growth plan
Leveraging digital
3
RETURNS Membership fee income
Accelerating new club growth Sam’s new club growth
10-15
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Capital expenditures update and forecast CapEx Detail
FY12 Actual
FY13 Projection
FY14 Projection
Total Capital Spend
$0.8B
~$1B
~$1B
New Clubs
3
9
10 - 15
Relocation and Expansion
6
5
2-5
Remodel Projects
65
70
65 - 75
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Savings Made Simple framework drives strategy • Strong performance • Strategy remains consistent
Differentiated Merchandise
– Member driven merchandising Lasting Member Relationships
Superior Value & Growth
Talent & Continuous Innovation
Efficient Engaging Experience Anytime Anywhere
– In-club efficiency • Accelerated growth plan
– Piloting new Membership fee / benefits structure – New club growth
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