To realign with their new and more digital strategy, Madison Sam’s Club closed to the public at the end of January.
The store, which was located at 7050 Watts Rd., is one of 63 Sam’s Club locations in the U.S. to close, according to a Sam’s Club press release. The release also stated 12 of the closing stores will be converted to eCommerce fulfillment centers for their online store.
The decision to close the Madison Sam’s Club location was a difficult one, Sam’s Club spokesperson Laura Ladd Poff said.
“Part of running a healthy business is managing our real estate portfolio and after a thorough review of our existing portfolio, we’ve decided to close a series of clubs and better align our locations with our strategy,” Poff said.
This strategy is Sam’s Club and Walmart’s objective to speed up their delivery of online orders, Poff said.
The closing, announced Jan. 11, will affect 129 employees who work for the store, Wisconsin Department of Workforce Development spokesperson John Dipko said.
The Wisconsin DWD’s Dislocated Worker Program provides transition assistance to workers and companies affected by worker layoffs, Dipko said. The program includes Rapid Response Teams to help companies and worker representatives develop a practical transition plan.
“The DWD and the South Central Rapid Response Team will work with the affected parties to offer rapid response services,” Dipko said. “Workers affected by a permanent layoff may also access basic re-employment services at no charge through the state’s Job Centers.”
The DWD provides many services to workers in need, including resume writing and interviewing workshops, job search strategies and career and resource fairs, Dipko said.
In addition to the assistance, the DWD will be giving to workers from these closures, Sam’s Club plans to help employees with their transition, Poff said.
“Our hope is that many associates will be placed in nearby locations,” Poff said. “Beginning on the day of the announcement, associates will continue receiving compensation for 60 days while we help them look for other opportunities in nearby clubs or Walmart stores.”
While the closing of Sam’s Club will cause many workers to be laid off, the good news is unemployment in Madison is very low right now, said Jerry O’Brien, executive director for The Kohl’s Center for Retailing Excellence in the School of Human Ecology at University of Wisconsin.
Many retailers are looking to hire someone with experience, so O’Brien is hopeful the workers can be rehired quickly.
In addition to the loss of jobs, members will lose their neighborhood store. But O’Brien believes members who shopped at the store will either go to another store or move their shopping online.
“There are a lot of people that this was their primary shopping place,” O’Brien said. “There will be some adjustment there, however, I do think they will be able to find other places to fill that need whether it’s online or at Costco or some other local supplier.”
But the move to online retail by Sam’s Club isn’t unique among stores in the U.S., O’Brien said.
O’Brien believes over the next few years, many stores will start to invest more in their online presence to keep up with the “new” economy.
“Retail is going through a big transition right now, and most retailers are finding that they need perhaps a smaller footprint for their stores — or less stores in general — because their online store can help one store serve a bigger market than it did just a decade ago,” O’Brien said.
With an increasingly digital world, many people do their shopping online. But according to a study by Accenture, millennials are more likely to shop in stores than earlier generations. In fact, they found 83 percent of millennials actually prefer shopping in discount and mass merchant stores.
While this could mean less online shoppers than there are currently, for O’Brien, the closure of the Madison Sam’s Club will bring about some positive changes for company.
“For Sam’s Club in particular, closing the stores that they closed, they can invest that money to work on their online presences for Sam’s Club and also Walmart in general,” O’Brien said. “They need to get some funds to be able to expand their online presence, so many companies are looking at getting the most out of their physical stores. In some cases, that might mean there are too many stores in that area or that a store is not as effective as putting that store online.”