Sam's Club China quietly became Walmart's 20% growth engine — and the membership-club read-through points to BJ and Costco too

The14-percentage-point spread between Sam's Club China's 20.7% Q2 FY27 net-sales growth and Walmart's 5.9% consolidated comp is structural. China's modern grocery retail sales fell 2.5% in the first half of 2026, while Walmart Group expanded market share by 1.2 percentage points — gains that flowed almost entirely into Sam's Club's bulk, private-label and 30-minute-delivery model.

Sam's Club China's 10.7 million paid members each contribute ¥260 for a basic membership or ¥680 for premium, and SCMP estimates total annual membership revenue will reach ¥3 billion (~$450 million) in 2026. At ¥1.3 billion for 2025 (per the Biggo/June 2026 recap of Walmart's 2025 Investor Conference), membership fee revenue already compounds faster than merchandise revenue — the same dynamic Costco deploys globally, where membership fees totaled $5.32 billion in calendar 2025, up 10.3%.

Two mechanics distinguish the China club model from the US template. First, the renewal cycle is sticky — Sam's Club China's renewal rate is one of the highest in the global fleet, and the prepaid annual fee compounds independently of merchandise cycles. Second, the cloud-warehouse network (over 500 hubs as of May 2026) lets 30-minute delivery ride on top of the existing 67 clubs, which is why e-commerce penetration crossed 55% in Q2 FY27. Hema tried this approach with its Hema X membership format and shut the last store on Aug 31, 2025 — the only Chinese grocer to attempt the format at scale.

The Chinese grocery incumbents Sam's Club displaced are now in retreat. Yonghui Superstores guided for a 2025 net loss of RMB 21.4 billion, widening from RMB 14.7 billion a year earlier, while Sun Art Retail (operator of RT-Mart and Auchan) trades near HKD 1.05 with a Wall Street fair value roughly 76% below its base-case price. Alibaba's Hema exited the membership-store business entirely in 2025, validating Sam's Club's positioning by demonstrating that even a deep-pocketed tech retailer could not make the format work.

The China data crystallizes a thesis US investors have been pricing in for years. Costco closed FY25 with $269.9 billion in net sales and 81 million paid members, with membership-fee revenue compounding at low double-digits and operating leverage driving an EBIT margin of 3.9% on a 12.8% gross. BJ's Wholesale reported Q2 FY26 net sales of $5.66 billion (up 9.9% year-on-year), membership fee income up 9.9% to $135.6 million, and an 8.5-million-member record — yet trades at a 0.5x price-to-sales and a 5.4x price-to-book, the cheapest valuation in the US club trio.

Near-term: Walmart's Q3 FY27 earnings release (period ending Oct 31, 2026) lands around Nov 19, 2026, and management guided for 3.0–3.75% net-sales growth. China will likely print another ~20% sales quarter with comps above 9%. BJ reports Q3 FY26 results in early December, where membership-fee growth above 10% would confirm the US read-through is intact. Costco's next US comparable is the Q1 FY27 print in December — the company's Hong Kong listing history and Kirkland Signature expansion are the model Sam's Club China is cloning.

Long-term risks to the thesis: (1) Chinese consumer slowdown deepening — a negative GDP print would compress average ticket even if member counts hold; (2) Costco accelerating in China after its Shenzhen success (8.7B yuan2024 sales, +58.2%) — at seven mainland clubs it has scale headroom; (3) regulatory friction over membership fees or cross-border data flows — the ¥3B 2026E fee revenue is exposed if Beijing tightens prepaid-fee rules; (4) private-label cannibalization — Member's Mark now drives ~50% of merchandise sales growth in two years, but a quality misstep could compress renewal rates.

Sam's Club China is the cleanest membership-flywheel story in global retail: $24.6 billion in FY26 sales growing19%, 10.7 million locked-in members at ¥260–¥680 each, 55% e-commerce penetration, and a competitor set in retreat. The thesis for Walmart is no longer \"is the US holding up\" — it is \"how long can Sam's Club China compound above 15%.\" The read-through for Costco and BJ's Wholesale is that the membership-club model scales in markets that punish traditional grocers, and that the recurring-fee economics deserve a multiple premium that pure-merchandise retailers like Yonghui Superstores and Sun Art Retail cannot match.