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Sam's Club unveils three new in-house brands

/ Source: The Associated Press

Wal-Mart's Sam's Club is rolling out three new exclusive brands in a bid to maintain the sales momentum it's enjoyed over the past five quarters and lure more shoppers with its groceries.

The warehouse club chain run by Wal-Mart Stores Inc. is launching Artisan Fresh, an array of baked goods from baguettes to apple pies; Simply Right, a personal care collection including diapers and pet care; and Daily Chef, which includes groceries such as olive oil.

The new brands will be rolled out to all 600-plus stores by the end of October. In many cases they will replace its store label Members Mark.

The launch builds on the efforts over the past year to improve the quality of its merchandise.

"The strategy is working. We're staying the course — the member is responding," said Linda Hefner, executive vice president and chief merchandising officer during a media tour of a Sam's Club store, a few miles from its headquarters. Wal-Mart's annual shareholders' meeting is Friday.

It wants 20 percent of what its own customers spend on food and consumables like paper towels to be spent at Sam's Club, up from 12 percent.

Efforts to enhance Sam's Clubs' portfolio of merchandise have already paid dividends, inching closer to arch rival Costco Wholesale Corp, the largest wholesale club operator and considered a gold standard for the industry. In its latest fiscal year, ended Jan. 31, Sam's Club, which accounts for about 12 percent of Wal-Mart's total revenue, posted a revenue increase of 3.5 percent to $47.8 billion. That compares with a 0.1 percent increase at Walmart's much bigger namesake U.S. business.

To drive sales further, Sam's Club is focusing on meat, a big attraction for members, as well as health and beauty products.

Hefner told reporters that its bid to grab more customers won't come at the expense of Walmart stores because Walmart pulls in lower-income shoppers. The Walmart shopper has an average household income that ranges from $30,000 to $60,000, much lower than Sam's Club's customer, whose average household income is about $75,000.

Sam's Club has started to roll out Artisan Fresh's goods in deli and bakery; products included a three-pound all natural chicken apple sausage for $12.88. There were also five-pound $9.98 lattice apple pies.

Simply Right will start to appear in stores this month, while the rollout for Daily Chef will begin in July.