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The Honolulu Advertiser

Posted on: Friday, October 22, 2004

Sam's Club opens second store

By Andrew Gomes
Advertiser Staff Writer

When Sam's Club asked Makiki photography studio owner Sandy Holley to become a member of its nearby Ke'eaumoku Street store that opened yesterday, he committed to more than just becoming a new customer of the members-only retailer.

Ron Folk, a regional manager for Sam's Club, leads a cheer for customers arriving at the grand opening of its Ke'eaumoku store. Opening day drew a mix of business owners and consumers.

Photos by Jeff Widener • The Honolulu Advertiser


Whole fish is among the many options at Sam's Club's Ke'eaumoku store, the second in Hawai'i. Business customers make up about 60 percent to 65 percent of Sam's customers.
Holley got out of the film processing business, sold his company's three hulking film development machines and rented out 450 square feet of newly freed-up shop space.

The owner of Photoworld Hawaii also cut his electricity, labor and supply costs, and now gets all his nondigital photos — often hundreds at a time — processed by Sam's.

"This makes life easier," he said, estimating that he saves roughly $3,000 a month just from reduced electricity bills, labor and rent expenses. "It pays for us to use their lab."

Holley was one of many new Sam's customers who turned out for yesterday's opening of the 150,000-square-foot store that drew a mix of business owners and consumers.

The Ke'eaumoku Sam's is the top half of the double-decker big-box retail project kicked off last week with the opening of O'ahu's third Wal-Mart.

For Sam's, which is owned by Wal-Mart Stores Inc., the expansion gives the roughly 625-store chain a second Hawai'i location and better footing to compete with its more established rival, Costco, as well as smaller retailers and distributors.

Sam's entered the Hawai'i market in 1993 with a Pearl City store. Yesterday's opening in an urban Honolulu neighborhood densely populated with residents and small businesses did not draw a big initial crowd, but people who turned out were eager to visit the store that most said made shopping more convenient.

Pam Onley, a visitor from Australia staying in Waikiki for a week, is a Sam's devotee even though the chain has no stores in her country.

"I had planned to go to the Pearl City store," she said. "The hotel told me about the opening. I said, 'Can I walk it?' They said yes. I love Sam's."

Onley, who shops at Sam's when on vacation in the United States, planned to shop for jewelry, clothes and DVDs.

Phillip Kuala, a Kapahulu resident who came to the Wal-Mart opening last week, used a 1-day guest pass to browse through the store, for which he said he'll probably buy a membership.

"Today is my day off," he said yesterday. "I wanted to see what variety they have."

Sam's caters mainly to businesses, but also to consumers. On one shelf there were 50-pound bags of unpopped popcorn, 350-count popcorn bags, gallon jugs of popping oil and a $500 popping machine. Nearby one could find automobile tires, body boards and two dozen varieties of poke.

Company spokesman Bob Mcadam said Sam's doesn't disclose membership or sales figures, and would not estimate how much membership was expected to grow from the new store.

The new store is expected to help Sam's to better compete with Costco, which has three O'ahu locations in Waipi'o, Iwilei and Hawai'i Kai.

"We think this absolutely allows us to serve more customers," Mcadam said. "It's all about convenience. For the most part this (area) is a market we haven't touched."

To help build up membership, Sam's made thousands of 1-day guest passes available through mail and newspaper advertising, allowing guests to pay a 10 percent service charge on a purchase unless they become a member.

The basic business membership costs $30 a year. Nonbusiness memberships start at $35.

Business customers make up 60 percent to 65 percent of Sam's customers, but much more in sales because of their large purchases compared with consumers.

Sky Son, chairman of Liliha grocery store SkySon USA Market, said he maintains memberships at both Costco and Sam's, spending an average of $50,000 a month between the two stores.

Yesterday at Sam's he spent $1,500 and needed to bring a helper to cart away his purchase that included 101 cases of saimin, 384 cans of corned beef and 540 cans of vienna sausage.

According to Sam's, its biggest categories of business customers, in order, are offices, convenience stores, construction/maintenance and restaurants/food service.

At Rainbow Crackseed in Kane'ohe, Yul Pyun typically buys about 20 percent of his store inventory from Sam's in Pearl City. Yesterday, he loaded up his minivan in the Ke'eaumoku Sam's parking lot with ice cream, hot dog buns, soap, cups, gum and more. "This is more convenient for us," he said.

Jaime Ubongen, the owner of vending machine operator JC Snacks Vending, toured the store on Wednesday to see what it had to offer. Yesterday, a flat-bed truck driver picked up Ubongen's order — mostly soda and cookies stacked chest high on three pallets wrapped with plastic.

Ubongen said he likely will use Sam's online ordering to make purchases he can pick up without stepping foot in the store. "It's convenient for me," he said. "It went well."

Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.