Meet the Sam’s Club CEO tasked with taking on Costco

Meet the new CEO of Sam’s Club: Latriece Watkins.

As you’ll hear from my interview with Watkins this week’s episode of Fast Company’s Most Innovative Companies podcast, she is a Walmart veteran, who began her career in the real estate division in 2006. Over the next two decades, she rose up through the ranks to become Walmart’s chief merchant in 2023, making her one of the most powerful people in the retail industry, responsible for choosing the $500 billion worth of products the company sells every year.

In recent years, Watkins has made a deliberate attempt to woo higher income consumers into stores by introducing higher-end brands, like Sonos and LaRoche Posay, as well as elevating its fashion, home and food private labels. Her team’s product curation appears to be working: In recent quarters, Walmart’s has been gaining market share among households that make upwards of $100,000 a year.

Now, Watkins has been tasked with running Walmart’s membership club, which generated $90.2 billion in net sales across its 600 stores in 2024 — making up roughly 13% of Walmart’s total revenue. In many ways, this promotion makes sense, since Sam’s Club customers tend to be more affluent than those from Walmart. Watkins has proven she’s skilled at meeting these needs of these customers.

Watkins is now tasked with stealing market share from CostCo, the biggest player in the membership warehouse club, which generated $269.9 billion last year, an 8.1% increase over the year before. Part of CostCo’s success has come from its private label, Kirkland, which now drives roughly a third of its total revenue.

Watkins is skilled at developed successful private labels. It was under her leadership that Walmart launched its first new private label grocery brand in two decades, called Bettergoods. Every aspect of the brand — from its chic, colorful packaging to its focus on global flavors — was carefully designed to win over today’s consumers. And yet 90% of products in the line cost under $5.

Sam’s Club has its own private label called Member’s Mark, which also generates about a third of its revenue. Part of Watkins’ mission will no doubt be to ensure that Member’s Mark grows as a business, and continues to evolve to keep pace with changing consumer tastes.

In some ways, Watkins has the opportunity to be more experimental at Sam’s Club than she was at Walmart. As a smaller, nimbler brand, Sam’s Club has become something of an innovation lab to test out retail concepts that, if successful, may be adopted by Walmart.

For instance, in 2024, Sam’s Club unveiled cashierless checkouts in a few stores: Customers simply scan products themselves on their Sam’s Club app, pay for them using their credit card, then walk out the door. (Entrances now have arches equipped with computer vision to check what’s in a person’s cart, avoiding manual receipt checking.) Sam’s Club also tries things out with its private labels. In 2022, it set out to remove 40 potentially harmful ingredients in the Member’s Mark line — a goal it achieved last week. Walmart used learnings from this process to make Bettergoods products without these ingredients as well.

Watkins has helped Walmart navigate through difficult times, from a volatile economy to new tariffs to inflation. She’s well-equipped to steer Sam’s Club through these choppy waters.

source https://www.fastcompany.com/91476512/meet-the-sams-club-ceo-tasked-with-taking-on-costco