Sam's Club upped the ante in its retail rivalry with Costco on Tuesday with a hefty pay raise for its 100,000 employees.
Sam's Club increased its starting pay for workers by a dollar to $16 per hour and opened the door for longer-tenured employees to receive even larger pay hikes over time. The new plan goes into effect Nov. 2 as the holiday shopping season ramps up for the warehouse outlet.
The plan attempts to counter a move made this summer by Costco, which set its minimum wage at $19.50 per hour. While Sam's Club's plan doesn't match that total, it puts an emphasis on retaining its employees with raises ranging from 3% to 6% based on years of service, with the average rate expected to be in the $19 range.
"Until now, retail compensation has largely been about hourly wages, and it's almost unheard of to talk about front-line associate compensation in terms of a predictable financial future, Sam's Club president and CEO Chris Nicholas said in a statement. "That changes for Sam's Club starting today."
Sam's Club hopes that its workers are more likely to keep their jobs if given the opportunity to earn more over time. That's considered one of the larger challenges in the retail sector, where turnover averaged 60% in 2022, Nicholas said.
"As associates invest their time, skills and knowledge in us, we've been investing in them and their families, creating a place of hope and opportunity through a multi-year journey that has the potential to transform lives," he added.
"Our new approach is one step in a series of investments we've made in our people over the last several years, all designed to provide more meaningful jobs and build successful teams."
Owned by Walmart, Sam's Club becomes the latest retail giant to increase wages for workers in the wake of the COVID-19 pandemic, which saw strong demand for front-line employees that resulted in overdue raises. Sam's Club's minimum wage was only $11 per hour in 2019.
