Sam's Club is changing the way it pays employees in an attempt to attract and retain quality talent in a tight labor market.
The Walmart-owned membership retailer announced Tuesday it's increasing pay by 3 to 6% for nearly 100,000 employees, with longer-tenured workers seeing bigger raises, starting Nov. 2. This will lift Sam's Club's average hourly employee pay to above $19 from the current $15 on top of their potential to earn thousands of dollars in bonuses annually, the retailer said.
Sam's Club said the new pay plan gives employees a predictable roadmap of pay increase milestones and a "longer-term perspective" on how they're balancing their personal financial goals. The retailer says easing these financial questions will allow employees to better fulfill "the responsibility to be brand ambassadors on the front lines of customer experiences" as well as reduce turnover — which averaged 60% in 2022, it said.
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"At Sam's Club, we believe delivering an unparalleled experience for our members starts with investing in our frontline associates," said Chris Nicholas, Sam's Club president and CEO, in a LinkedIn post. "As associates invest their time, skills and knowledge in us, we've been investing in them and their families, creating a place of hope and opportunity through a multi-year journey that has the potential to transform lives."
In the last five years, Sam's Club says its average hourly wage has increased by nearly 30%, and the number of hourly employees promoted to salaried roles has increased by nearly 400%. In addition to other wage investments it's made in the time frame — like annual stock grants — the company said it's focused on creating greater flexibility, like with the implementation of block schedules, and having more employees reach 40-hour weeks with an 11% increase in full-time associates.
With 600 clubs across the U.S. and Puerto Rico, the $86 billion doesn't crack the top 10 largest retailers in the country, led by Sam's Club's parent company Walmart with $635 billion in 2023 revenue, according to Capital One Research. Still, its step to increasing employee pay is an effort to remain competitive among others on that list, namely No. 3, Costco.
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Both Costco and Sam's Club are membership retailers offering bulk products often for discounted prices. But they have a few differences, like Costco's annual membership fee costing $65 a year compared to Sam's Club's $50.
The larger retailer has also been known to offer some of the highest starting wages in the industry. In July, even its lowest earners saw a 5.4% pay raise when it gave hourly workers a $1-per-hour raise, bringing its minimum hourly wage to $19.50.
It's a trend that's been on the upswing in recent months as the labor market remains rocky, with layoffs staying low but alongside job opportunities. In an attempt to keep the workers they do have, retailers have turned to better benefits packages, but many still can't keep enough employees on the schedule.
