UPDATED: Sam’s Club closures have immediate effect on Cordova businesses

Nichols’ Backdoor Store and the Powder House begin to make vendor changes amid closings

Cartons of Darigold milk sit in the refrigerator at Nichols’ Backdoor Store on Thursday, Jan. 11, 2018. Owner, Dan Nichols, purchases the milk from Sam’s Club. Walmart announced the closing of Sam’s Club branches nationwide, including the three Alaska locations. Photo by Emily Mesner/The Cordova Times
Cartons of Darigold milk sit in the refrigerator at Nichols’ Backdoor Store on Thursday, Jan. 11, 2018. (Photo by Emily Mesner/The Cordova Times)

Local businesses are already feeling the effects of all three Alaska Sam’s Clubs closing.

Walmart abruptly announced Thursday the closure of 63 of its 650 Sam’s Club stores nationwide, including three Alaska locations that will shut their doors forever on Jan. 26.

“It’s a really sad day when a business closes down … I’m just puzzled by the whole thing,” said Dan Nichols, owner of Nichols’ Backdoor Store.

He spoke of friendships he has created with employees at Sam’s Club, a company he’s been doing business with for 20 years. “I really feel for those people.”

Nichols’ Backdoor Store receives 20 pallets a week from Sam’s Club, he said.

“We get our milk from Sam’s Club, and it’s Darigold, and we have a lot of people complain that they don’t like the Costco milk,” Nichols said.

After news of the closings broke from numerous media outlets, Nichols and store manager Steven Graves began the tedious process of talking with vendors.

“(We’re) trying to figure out what is the best route, not only for the community but which vendors are affordable,” Graves said. “The whole reason why we use Sam’s Club and Costco so much is it’s at a bulk rate, which is more affordable for the customers.”

Nichols raised concern for those who shop at retail warehouse clubs in Fairbanks.

“It’s a big deal for the state of Alaska,” he said. “There are no Costco stores in Fairbanks.”

The nearest Costco is located in Anchorage, 359 miles south of Fairbanks, resulting in a seven-hour commute, each way.

Graves, who spent his day making phone calls to Costco, Walmart and other vendors, says that it’s a pretty significant loss, estimating 30-40 percent of the products in the store come from Sam’s Club.

In addition to dairy products, Nichols’ Backdoor Store gets the majority of its bulk items, such as water and paper towels, from Sam’s Club.

“It’s going to make a big difference in the way we do our shopping,” Nichols said. “I’m looking for a rough month ahead until they get this all figured out. We will survive.”

The Powder House Bar & Grill is another local business trying to figure out their next step for bulk purchasing.

“It’s a real bummer,” owner and operator Libbie Graham said. “Costco isn’t as easy to shop for us.”

Graham notes Sam’s Club’s system of palletizing their bulk orders, making it easy for her to choose items in the store and then send them to the back to get palletized to hold for later pick up. This allows them the freedom to maximize their shopping time while in Anchorage, which is especially important during short ferry turnaround times.

She is worried if Costco becomes her only option for bulk shopping, she may be required to ship her products in totes, a less reliable and less efficient mode of shipping.

This concern was also brought up by Nichols, who explained that their process for bulk orders and shipping didn’t run as smoothly at Costco as it did at Sam’s Club. At Costco, he must write the items he needs on a list and give it to employees at the back of the store who then pull the items from the shelf, possibly resulting with a mixed product due to this process.

Graham, and occasionally the Powder House staff, will travel to Anchorage for supplies once a month during the winter and every three weeks during the summer. Her first stop when she arrives is the Sam’s Club on Old Seward Highway, one of two Sam’s Clubs in Anchorage.

“They’ve got everything that you pretty much need,” she said listing off foil, soda, coffee, juice, paper products, cleaning supplies and canned goods as just a few of the many items she purchases from Sam’s Club.

Graham also shops locally, buying produce from Nichols’ Backdoor Store.

She was planning her next trip to Anchorage in 10 days, just six days before all Alaska Sam’s Club locations will have their last day of operations, scheduled for Jan. 26. She is unsure what products will still be available.

Sam’s Club representatives took to Twitter this morning to offer an explanation stating, “After a thorough review of our existing portfolio, we’ve decided to close a series of clubs and better align our locations with our strategy. Closing clubs is never easy and we’re committed to working with impacted members and associates through this transition.”

“It’s so much more expensive to go through the food distributors,” Graham said. “We’ll see how it all shakes out.”

UPDATED, 2:50 p.m. Friday, Jan. 12

People wait in line to shop at Sam’s Club, 8801 Old Seward Hwy, in Anchorage on Friday, Jan. 12, 2018. This line spanned past Texas Roadhouse, south of Sam’s Club
Photo by Audrey Burton/for The Cordova Times

Cordova resident Audrey Burton extended her trip to Anchorage by a day after hearing the news of the Sam’s Club closures, hoping to catch liquidation sales.

She arrived ready to shop at 9:45 a.m., Friday, Jan. 12, at the Old Seward Hwy Sam’s Club. It wasn’t until 10:35 a.m. that she made it through the doors.

“They’ve stopped people coming in the door so they could let people out,” Burton said.

According to Burton the line spanned from Sam’s Club, north to Michaels and south past the Texas Roadhouse, a total distance of more than a quarter of a mile.

“It’s is extremely crazy, I’ve never seen anything like it,” Burton said as she entered the store.

Once she made it through the doors, she discovered that everything was 25 percent off.

A Google Maps screenshot shows the distance between Michaels and Texas Roadhouse, where two lines formed, one north and one south of Sam’s Club, as people waited to shop at Sam’s Club, 8801 Old Seward Hwy, Anchorage, Alaska. People waited in line Friday, Jan. 12, 2018, after announcements of the store closures came Thursday, Jan. 11, 2018.
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Emily Mesner is a staff reporter and photographer for The Cordova Times. Reach her at emesner@thecordovatimes.com. Emily graduated from Central Michigan University, earning a degree in photojournalism with a cultural competency certificate. She first visited Alaska in 2016, working as a media intern for the National Park Service in Kotzebue and Denali National Park and Preserve, and has been coming back ever since. To see more photos, follow @thecordovatimes and @emilymesnerphoto on Instagram.