Sam’s Club President & CEO looks back on first year in role
When Kath McLay was named President & CEO of Sam’s Club in November 2019, there was no way to predict what was coming next.
To mark her first anniversary leading the warehouse retailer, we sat down with Kath and reflected on the unexpected way her tenure has unfolded.
Q: First of all, we’re nearing Thanksgiving and the holiday season. What are you thankful for?
Kath McLay: That the first year is under my belt! But in all seriousness, I am grateful for a lot of things. Specifically, my family, a great team, and a great place to work. I’ve spent a lot of time in the field this year, and I’m continually amazed by our associates who work so hard to take care of our members. I also have to say I’m grateful for Scan & Go, which is my favorite way to shop anywhere and I’m proud we have it at Sam’s Club.
Q: We’ll get to Scan & Go in a bit. Suffice to say, this was not the year that you expected. Tell us a bit about what you thought your first year would be like and what you’ve actually experienced.
KM: Yeah, that’s an understatement. I joined the team right before Thanksgiving, and Thanksgiving and Christmas are really the Super Bowl in retail. I thought that was jumping into the deep end, but when you consider what came next, that was really the kiddie pool. I spent the first two or three months getting through the holidays, visiting clubs and listening to associates and members to really frame up my thinking. And then March hit and the world changed.
Q: What do you mean by that?
KM: We started seeing early signs of panic buying in late February and early March. By the middle of March, we just couldn’t keep things like toilet paper and cleaning supplies on the shelves. I remember I was in Chicago on the day much of the country started shutting down. You know, as a retailer, it is so important that you get out to the field and see how members and associates are responding. I wanted to see it for myself. I spent most of that visit in the parking lot pulling carts because the foot traffic was just extraordinary. Like nothing I had ever seen before. A few weeks later, I was on a different trip and on the flight home, I looked down and there were very few cars on the highways. It was such an eerie feeling. Those club visits really solidified what “new normal” meant for Sam’s Club.
Q: What were the early days like? Did you start working from home?
KM: Yes, at the Home Office, we started working from home. In the beginning, we were meeting as a leadership team every day, because so much information was coming at us and it was changing all the time. That helped us move fast and make decisions quickly. I’m proud of everything that we accomplished under pressure.
Q: When the pandemic hit, what did you tackle first?
KM: First and foremost, it was taking care of our associates and keeping them and our members safe. We had to move quickly to secure the necessary [personal protective equipment] for associates, enhance sanitation protocols, add handwashing stations and install sneezeguards. Still, more than eight months later, that’s something that we spend a lot of time thinking about and revisiting with our associates because their safety is our top priority.
Q: Beyond in-club changes like sneezeguards and enhanced cleaning, what were some of the other things the team did to help members?
KM: I’m super proud of how the team prioritized making shopping safer and easier for members during the pandemic. We launched a special concierge shopping service for the immunocompromised in just six days, increased adoption of our contactless payment offer, Scan & Go, and we launched curbside pickup nationwide to provide our members even more ways to shop. We also held senior hours and hero hours for first responders. A lot of it was great technology, but it was all because of our associates. Our associates – in the clubs, in our fulfillment centers and distribution centers and our corporate offices – have done amazing things. I really believe they are some of the greatest heroes of this pandemic.
Q: Sam’s Club has had several strong quarters during the pandemic. What do you attribute that to and how has the pandemic changed your strategy going forward?
KM: Our associates, definitely. It is not lost on me that they have a choice, and they choose to come to work each day to serve our members. Without our associates, we would not have been able to handle the extraordinary volumes, foot traffic and online sales that came with the pandemic. Our associates took pride in the service they were providing their communities, and it showed in our results. I also think Sam’s Club was uniquely positioned to step in and serve members in ways they wouldn’t have imagined they needed a year ago. We have had Scan & Go as a contactless payment solution for years. We were able to accelerate curbside pickup. Those services, combined with a consumer shift to bulk purchases, led to incredible membership growth and sales volume. But none of that would have been possible without our associates.
When it comes to the strategy, I would say it hasn’t changed – it just accelerated. Nearly everything we have done this year in response to the pandemic was on our roadmap – just on a different timetable.
Q: On top of COVID, racial equity was a huge focus in 2020. Talk to us a little bit about George Floyd. How has that affected you and the team?
KM: You can’t talk about 2020 without talking about George Floyd and racial injustice. Seeing the murder of George Floyd deeply affected me, and made me take stock of who I was as a leader. I have always been a person who believed in standing up for what is right and calling out what was wrong, and it was very important to me that I clearly articulate to my team and our members what Sam’s Club stood for. I didn’t want there to be any grey area. Sam’s Club stands against racism, and we want to be part of the fight for racial equity. Simply stating those words has opened up so many conversations within our company. I’m proud of the work we’re doing as a company, along with Walmart, to fight against racism, but I’m also proud of the work I see our associates doing as individuals.
Q: Last question: Heading into 2021, what are you most excited about?
KM: I think most people will say that they will be just excited for 2020 to be over, but honestly I am so proud of how we grew as a company during this year. This year isn’t something that we just got through; it’s something that we grew from. And I’m excited for what that means for 2021. It is still going to be really hard. We will still be operating during a pandemic. But we’ve learned to move fast and serve members in new ways, so I think our associates and members can expect a great year. We have some great items in store and the team is working on some new technology that will make the shopping experience even better. We tell our members to expect something special at Sam’s Club, and I hope 2021 will be just that.
Kath tours a club in Orlando, Fla., in December 2019.Kath tours a club in Orlando, Fla., in December 2019.
Kath meets some of our bakery associates in a Kansas City, Mo., club on Super Bowl weekend in January 2020.Kath meets some of our bakery associates in a Kansas City, Mo., club on Super Bowl weekend in January 2020.
Kath meets Kenny Muni, a 30-year associate, on a tour in Daytona Beach, Fla., in May 2020.Kath meets Kenny Muni, a 30-year associate, on a tour in Daytona Beach, Fla., in May 2020.
Kath talks with Grover White about member service at a Chicago club in July 2020.Kath talks with Grover White about member service at a Chicago club in July 2020.
Kath steps in as an exit tech associate while on a tour in Chattanooga, Tenn., in July 2020.Kath steps in as an exit tech associate while on a tour in Chattanooga, Tenn., in July 2020.
Kath learns about new technology at the Perris, Calif., fulfillment center in October 2020.Kath learns about new technology at the Perris, Calif., fulfillment center in October 2020.