Innovations keep Warehouse Club competitive

Discount Store News, April 5, 1993 by Don Longo

SKOKIE, Ill. -- New chairman and chief executive officer Everett L. Burkardt believes The Warehouse Club can be "the best regional cash and carry club operator in the business."

In an interview with DSN last month, the former head of Sears' catalog business, who joined The Warehouse Club less than three months ago, said he was encouraged by the strides being made by the club based here north of Chicago.

With $241 million in 1992 sales, The Warehouse Club is the eighth largest chain in the membership warehouse club industry, according to DSN's latest census (see DSN, March 1, page 18). However, with only 10 clubs in the Midwest, the chain has been unable to keep pace with the tremendous growth of such competitors as Sam's Club ($12.3 billion in sales) and Pace Membership Warehouse ($4.4 billion in sales), each of which have several clubs in The Warehouse Club's market areas.

"We have to take care of the five-mile radius around our clubs with tender loving care," said Burkardt. Since clubs carry similar merchandise at essentially the same prices, regional chains like The Warehouse Club have to be innovative and leading edge, "not always followers," according to Burkardt.

Examples of that type of innovation at The Warehouse Club include: * Expansion of a two-store test of fresh meat to all units; * The successful addition of basic juvenile apparel, up to size 6X. "We have a lot of members with children. We did extremely well with diapers so we figured juvenile apparel would do well, too," he said. The company has achieved double digit sales growth in this new department. * Installing new information systems to catch up with the technological advances in the industry. "We need to know more about our members," Burkardt asserted. * Improving relations with vendors, such as a dinner held in late January for 450 supplier executives, which included two days of meetings with buyers to allow the vendors to learn more about The Warehouse Club merchandising philosophy; * Bringing a retail flair to marketing communications with members. The club is planning to change the content of its members newspaper to use it more as a marketing tool with the aim of giving members a reason to come back to the club and shop.

Shortly after the interview with DSN, Burkardt also announced that Barbara Segers will join the company as vice president of marketing. Another former Sears employee, Segers held such positions as national manager of catalog marketing, general manager of catalog product, divisional merchandise manager, catalog manager and buyer.

Her most recent assignment at Sears, where she served for 29 years, was as national catalog marketing manager where she was responsible for the development and execution of the marketing and advertising plan for apparel, home fashions, tools, appliances, electronics and automotive.