Sam’s Club will raise pay to catch up with Costco

Sam’s Club said Tuesday it will raise pay to incentivize workers to stay with the company — and not jump ship to Costco.

Sam’s Club will raise pay to incentivize workers to stay with the company — and not jump ship to Costco. Sam’s Club, the membership club arm of Walmart, will increase its minimum wage to $16 starting in November from $15 an hour. It will also raise wages for its nearly 100,000 employees, ranging from 3% to 6% depending on their tenure. Sam’s Club charges customers $50 for a regular membership. To keep and grow its membership, Sam’s Club must meet a higher bar for customer service than retailers open to everyone. Sam’s Club hopes a steady workforce of higher-paid employees with financial incentives to stay with the company will lead to improved service. Its main competitor is Costco, which pays among the highest wages in retail — a minimum of $19.50 an hour, and Sam’s Club needs to raise its pay to stay competitive with Costco and other chains that have raised wages. “The thing that we’re trying to do here is create good jobs that turn into great careers,” Sam’s Club CEO Chris Nicholas told CNN. “Stability matters more for a club model than anywhere else.” Wages have climbed in the retail industry in recent years as employers boosted pay to staff stores and warehouses in a tight labor market. Since April 2020, average hourly wages for retail employees have increased around 16% — from $21.18 an hour to $24.48 in August. “Sam’s Club’s announcement follows a trend of companies adopting voluntary wage standards,” said Daniel Schneider, a sociologist at Harvard University who studies service industry work as co-director of The Shift Project. “That reflects the realization that these firms need to reduce turnover to manageable levels.”