Sam's secures Northeast Beachhead in N.J - Sam's Wholesale Club

Sam's Secures Northeast Beachhead in N.J.

DELRAN TOWNSHIP, N.J. - Displaying a number of innovations, Sam's Whole-sale Club has fired the first salvo in Wal-Mart's invasion of the Northeast.

Sam's opened its first unit in the East two weeks ago in Delran Township, a Delaware Valley community about midway between Philadelphia and Trenton, New Jersey's capital.

The Delran club raises Sam's unit count to 119 in 27 states.

The first Sam's in the Northeast was to open in Atlantic City, N.J., but a squabble with the gambling mecca's zoning board halted construction while several board members fought a state indictment on charges they extorted bribes from developers.

Sam's agreed to meet the board's demands for landscape beautification, and construction is "back on tractk," said Robert Bakalekos, general manager. But opening now is pushed back to about February of 1990.

Over the next 30 months, Sam's plans to open 18 units in the Northeast. Following the two New Jersey units will be seven clubs in Pennsylvania: Allentown, Harrisburg, Johnstown, Lancaster, Reading, Wilkes-Barre and York; six in New York: Albany, Binghamton, Poughkeepsie, Rochester, Syracuse and Utica; and units in Wilmington, Del., Portsmouth, N.H., and Portland, Maine.

Wal-Mart itself will follow Sam's beachhead by opening 10 Discount City stores in Pennsylvania starting next year, including three units in Philadelphia.

Both New Jersey Sam's units are located in former Two Guys stores that had been empty for a number of years. Both clubs will occupy about 130,000 square feet of the 160,000-square-foot stores. The owner, Vornado Properties, is attempting to find other retail tenants, such as a liquor and fabric store, for the balance. That compares with 100,000 square feet for the Sam's prototype.

The Atlantic City unit has been vacant for 13 years, while the Delran store was empty for nine years.

The Delran unit briefly became a Jefferson Ward store before Bradlees took over its lease last year. Bradlees already had stocked the store but never opened it after deciding to retrench and sell its Southern division stores.

Sam's is testing a 133,000-square-foot unit in Houston that features fresh meat and produce, a bakery, a Sam's travel club, and a business service center that offers faxing facilities and a package shipping drop.

Despite their larger size, the New Jersey Sam's clubs will take a standard merchandise approach, except for a small program with fresh produce. Woody Dupuis, who transferred from Lakeland, Fla., to manage the Delran unit, said Sam's in Oklahoma City also is testing produce.

Delran offers shrink-wrapped multipacks of lettuce, carrots, green peppers and celery, five-pound boxes of tomatoes and bags ranging up to 100 pounds of onions and potatoes. In fruits, it carries five pound bags of tangerines, oranges and grapefruits and gift packs of fancy pears.

In another spin-off from the Houston test store, the Delran Sam's opened with a new travel club service, Dupuis said, with promised savings on vacation packages, hotel accommodations and car rentals. The club provides tool-free numbers for club members to call direct to Hertz, Avis, Best Western and La Quinta for car rentals and motels.

Delran is budgeted to do $30 million the first year, Dupuis said.

As another joint promotional effort, the new Delran club's in-store signage pushes Sam's Long-Distance Club, a tie-in with MCI that promises Sam's business or Advantage Club members a 10 percent savings off MCI's regular rates.

Recognizing the importance of membership fees, Sam's is urging group members, who pay a 5 percent surcharge but no annual fee, to sign up as Advantage members. Advantage members pay $25 a year in fees, plus $10 for a second membership card, or the same as business members. Group members can qualify for the MCI discount only if they pay the fee to become Advantage members.

As a new convenience service for businessmen, the Delran club is offering delivery service for a fee of $25 per pallet load delivered for up to 20 miles. Beyond 20 miles and up to 50 miles, the fee is $35 per pallet for tailgate delivery.

The Sam's unit also is touting its new FAX ordering system. Businesses ordering $250 worth of goods can fax their orders for next day pickup.

And in an apparent first, Sam's has developed a 32-page Christmas gift catalog called, "The Magic of Christmas." Printed on slick stock in lavish four colors, the catalog is designed to be mailed. Opened cartons of the catalog were available for the customers at the Delran store's entrance.

As usual, Sam's is varying the product mix to accommodate differences in regional tastes and needs.

More pasta and less Mexican food is one example.

Taking into consideration the harsher Eastern climate, the Delran club carries a new item for Sam's, snowblowers, and stocks more winter clothing than do Southern units.

Given its larger size, the Delran Sam's picked up an idea from Carrefour and American Fare hypermarkets: putting a checking clerk on roller skates.

Both New Jersey units are having to work around a ceiling height of 17 feet, compared with the standard 25 feet Sam's whittled the difference to a net of 6 feet by recessing light fixtures by 2 feet.

Warehouse racking remains at the standard 14 feet, and Sam's will compensate by stacking half-loads on the top of the racks, said Bakalekos of the Atlantic City Sam's.

PHOTO : Top: Sam's Delran, N.J., unit opened with a small produce section in a spin-off from Sam's test unit in Houston. Right: In cooperation with MCI, Sam's promises customers 10 percent off MCI's long-distance rates. To qualify, though, group members must join Sam's Advantage Club, boosting club revenues by $25 to $35 a year per member.

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