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In Canada, the Globe and Mail reports that while Wal-Mart has enjoyed strong success north of the border, one exception has been its Sam’s Club membership warehouse format – there are just six in Canada, with no plans for any more.

To a great extent, the Sam’s problems can be traced to the enormous popularity of Costco in Canada, which has 71 stores there, which is perceived as “owning the space,” according to one analyst. Not only does Costco seem to have a strong connection to what Canadian shoppers want, but its personnel policies – Costco is perceived as paying its employees more and offering more benefits than Wal-Mart – are seen as more politically and culturally correct by many shoppers.

Mario Pilozzi, CEO of Wal-Mart Canada, has tried to put a happy face on the Sam’s problems. "At this point, frankly, the Sam's business is not what we would like it to be," he recently said at an analysts’ meeting. "However, there have been some very, very encouraging signs." For the moment, however, the company seems to be more focused on building supercenters than membership clubs.
KC's View:
We find the observations about political and cultural correctness to be particularly interesting, because it seems like this may be more of a prerequisite for retailers in the future.