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Business/Economy

In Fairbanks and rural Alaska, Sam’s Club closing is a ‘major blow’

  • Author: Annie Zak
  • Updated: January 11
  • Published January 11

At Pagoda Restaurant and Bar in North Pole, owner Benny Lin said he does most of the shopping for his business at the Sam's Club in Fairbanks.

He typically goes there at least five days a week, picking up items like oil, rice, peppers, paper products and cleaning supplies. The news on Thursday that his Sam's Club will close later this month left him wondering how his business will adapt.

"I was stressed a little bit, like, wow, what are we going to do?" he said. "It's so convenient. Now, everything we have to special order from the Lower 48."

Wal-Mart Stores Inc., Sam's Club's parent company, said Thursday that it will close 63 Sam's Club locations across the U.S. The fallout in Alaska — where, outside Anchorage, exorbitant costs for food and other goods are the norm — is expected to be especially pronounced. In Fairbanks and rural parts of the state, many families and businesses will be left without the sole bulk warehouse store they relied on for lower prices.

All of the membership-based chain's Alaska stores — the one in Fairbanks and two in Anchorage — will close permanently Jan. 26.

Sara Ewers and her husband, Nicholas Coleman, live in Fairbanks, where she works at Lavelle's Taphouse and he runs a hot dog cart called Between the Buns during the summer. His typical routine when the business is up and running is to hit Sam's Club each morning and then do food prep for the day. Now, Ewers said, her husband isn't sure what he'll do.

"I'm sure other businesses are feeling this too: If they're going to have to be buying from Fred Meyer or Safeway, what's that going to do for their costs?" Ewers said. She and Coleman are also expecting their first child in April, and that's one more reason it will be tough to lose the local option for bulk purchases.

Unlike Anchorage, Fairbanks doesn't have Costco. There generally aren't other stores similar to Sam's Club in the Interior.

For Ewers, the closures also get at something bigger about how she feels Outside companies see business in the Last Frontier.

"We're so rural and remote, they forget we're part of the United States and depend on these businesses," she said.

Mary Patkotak lives in Utqiagvik (formerly Barrow) and said making trips to the Sam's Club in South Anchorage when she's in town has become so regular, she has honed the perfect shopping routine.

She takes three large bins into the store and quickly fills them with 150 pounds of groceries and then heads to the airport, where she maxes out her luggage limit on Alaska Airlines for the trip back home. She does this about once a month.

Some key items are the 25-pound bags of flour — about $8.99 in Anchorage instead of more than quadruple that price up north — or the cases of five dozen eggs, which she can find for about $13 cheaper in Southcentral Alaska.

"I was really heartbroken to hear Sam's Club will be closing because now I have to check out Costco and learn their layout," Patkotak said.

The higher cost of doing business in remote Alaska was one factor in deciding to close the local stores, said Walmart spokeswoman Delia Garcia. The company is working on transferring Sam's Club's services for Bush Alaska orders to Walmart, she said.

"We know that service is important to customers in rural Alaska and we do want to be able to maintain that service," she said. "At this point, we're working through how to do that."

Fairbanks Mayor Jim Matherly said most restaurant owners he knows in town head to Sam's Club when they need condiments, coffee, liquor and nearly anything else.

Renna Hoener, owner of drive-thru coffee hut Forget Me Not Espresso in Fairbanks, said in an email she was scrambling all day Thursday to figure out where to get her products at comparable prices. Bob Burcell, co-owner of The Cookie Jar restaurant in town, said he'll feel the impact when he needs flour, sugar and canned milk.

"I'm left with two choices: Make a smaller cookie or raise the price," he said.

At Lavelle's Bistro, co-owner Frank Eagle said Sam's Club leaving will be a "major blow" to business.

"We're going to probably come down there and see you in Anchorage a little more often, take the van, fill it up at Costco," he said. He's not sure yet whether extra costs will get passed on to customers.

Lin, at Pagoda, said he'll need to order more supplies from Outside vendors.

Some, like Hoener, are hoping that Costco will swoop on the opportunity. Others are already prepared to turn to the internet for their needs.

Annie Gray lives in Fairbanks and has five kids. She uses Amazon Prime already but hasn't ordered groceries online before. Now, she said, maybe she'll be forced to because she's not going to depend on driving to Anchorage to shop.

"That's one of the biggest responses, 'Maybe Costco will come.' But in the meantime, I need toilet paper now," she said. "I can run to Safeway or Fred's, it's just going to be more inconvenient, and I'll have to pay more."

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