Walmart on Tuesday announced a new combined membership for Walmart+ and Sam’s Club Plus, priced at $120 annually, in an effort to attract cost-conscious consumers. The joint membership offers savings of approximately $100 compared to purchasing individual memberships, providing access to discounted prices at Sam’s Club, free delivery from both retailers, and a subscription to either Peacock or Paramount+. Walmart CEO John Furner stated the company is “raising expectations for what a membership can deliver: more money in their pockets and more time to call their own.” The move comes as Walmart focuses on lowering prices across a range of products, including food, in response to continued high inflation, which currently stands at 3.7% annually according to the Consumer Price Index. Nine in ten Americans cite prices as the most important factor shaping their economic outlook, a recent CBS News poll found.
Existing Walmart+ members can upgrade to the dual membership for an additional $22 per year, while Sam’s Club members can upgrade to Sam’s Club Plus, which includes Walmart+, for $60 more annually. Walmart’s Chief Financial Officer, John Rainey, announced in August price cuts across various categories, stating the company is “investing heavily in price because customers need us to and because we believe it drives market share gains over time.” Sam’s Club experienced a 26% increase in e-commerce sales in the fiscal second quarter, with net sales reaching $25.7 billion, including fuel. Globally, Walmart reported a 17% increase in membership revenue during the same period, with Walmart+ net additions reaching a record high for the second quarter.
Walmart stated that the costs associated with the membership program changes are not expected to significantly impact its fiscal third-quarter or full-year guidance. The company will also extend the joint membership benefit to its employees. While Walmart is betting on convenience and value to drive sales,
Our reading is that Walmart is attempting to consolidate its customer base and increase membership sign-ups by offering a combined subscription that appears more valuable than separate memberships. The company clearly believes that perceived savings and convenience will outweigh any potential drawbacks of bundling services, especially given current economic conditions. We interpret this move as a direct response to both high inflation and the competitive landscape of membership-based retail, with a focus on retaining and attracting cost-conscious consumers.
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