After years of unofficial buzz, retail giant Walmart confirmed this week that it wants to open a second Sam's Club store in Rochester.
No details, such as where it could be located or when it might be built, are yet available from the Bentonville, Ark.-based company. Rochester currently has a pair of Walmart Supercenter stores on the north and south sides of the city as well as a Sam's Club warehouse store by the north location.
There has long been talk that a south Sam's Club complex could be built in the Shoppes on Maine area, possibly near the 48th Street exit.
“We are always looking for opportunities to better serve our Rochester customers and are making plans to add a second Sam’s Club to serve the growing need among area customers who want to buy wholesale merchandise in bulk at affordable prices,” stated Delia Garcia, Walmart's director of communications by email this week.
Walmart opened its 136,000-square-foot north Sam's Club at 3410 55th St. N.W. in 1993 along with its north Walmart store. The south Walmart store opened in 2000, along South U.S. 63.
Sam's Club was Rochester's sole warehouse member store until Costco opened its own 150,000-square-foot discount club store plus gas station here in 2012. Rochester's Sam's Club underwent a $3.5 million remodel just months after Costco's opening.
While Walmart is the undisputed champion in the discount retail niche, Costco is the leader in the $390 billion warehouse club industry. Costco generated $102 billion in sales last year, while Sam's Club tallied $57 billion in revenue.
The recent excitement spurred by Mayo Clinic's Destination Medical Center initiative has drawn more developers and chains here.
While the city has grown, one retail expert doesn't believe that it's large enough yet to justify Sam's Club adding a second store.
"It makes no sense at all," commented David P. Brennan, a professor of marketing at St. Thomas University in St. Paul and co-director of the university's Institute for Retailing Excellence. "In regard to Rochester because of its size and relative ease of getting around, you don't need two stores to cover a market that size.It just doesn't make sense."
Sam's Club has nine stores in the Twin Cities area and each does about $65 million to $75 million in business a year, according to Brennan. Costco has six stores in the metro region. Each of its stores move an estimated $120 million to $130 million in merchandise a year.
Walmart's plan is to open between 17 to 22 new clubs this fiscal year. It's also planning to ramp up its presence in China. However, it also plans to cut about 2,300 jobs at Sam's stores.
While he believes Rochester is "more of a Costco market than a Sam's market," Brennan concedes that the larger southeastern Minnesota area might be a different story.
"In terms of regional draw, Sam's may be a better fit for that," he said.