Walmart(US:WMT) Hua Xia Shi Bao·2025-07-24 13:23Core Viewpoint - The controversy surrounding Sam's Club, triggered by the introduction of the low-quality Haoliyou pie, has led to a significant trust crisis, raising questions about its product selection strategy and brand positioning [1][2][5]. Group 1: Product Selection and Consumer Reaction - Sam's Club has faced backlash for replacing high-quality products with popular but lower-quality brands like Haoliyou and Pindao, leading to consumer dissatisfaction [2][3]. - Consumers have expressed concerns that the quality of products at Sam's Club is declining, which could jeopardize their loyalty to the store [1][6]. - The introduction of new products has not shown a clear price advantage compared to online platforms, raising further doubts about Sam's product selection strategy [3]. Group 2: Brand Positioning and Market Strategy - Sam's Club, as a membership-based store under Walmart, targets middle to high-income consumers who prioritize quality over price, differentiating itself from regular supermarkets [4][5]. - The store's self-proclaimed "selected" positioning is at risk as it increasingly offers third-party brands, which may not align with consumer expectations for health and quality [4][6]. - The proportion of private label products has decreased from 38% to 30%, indicating a shift away from its original strategy of offering exclusive high-quality items [5]. Group 3: Financial Performance and Growth - Despite the current controversy, Sam's Club has shown strong financial performance, with Walmart China's net sales reaching $19.975 billion in the 2025 fiscal year, a 17.4% increase year-on-year [5]. - The first quarter of the 2026 fiscal year saw a 22.5% year-on-year growth in net sales, indicating continued strong demand for Sam's Club offerings [5]. - The number of Sam's Club locations in China has been steadily increasing, with 55 stores opened as of April this year, showcasing its growth trajectory in a challenging retail environment [5].