April 29 (Bloomberg) -- Sam’s Club, the second-largest U.S. membership warehouse club, is using a promise of $270 million in savings to draw small-business customers during the worst recession in a generation.

In a three-month blitz to grab new patrons and bring back old ones, Sam’s says it has contacted more than 63,000 small businesses so far and reviewed their purchases of napkins, beef patties, soap and other supplies. Sam’s is part of Wal-Mart Stores Inc., the world’s largest retailer.

Restaurants, daycare centers and even churches “are hunkering down, cutting out unnecessary expenses and trying to manage their cash flow,” Catherine Corley, Sam’s vice president of small business, said in a telephone interview April 24. “With revenue falling, lowering their costs is really the only thing they can control right now.”

Sam’s, based in Bentonville, Arkansas, has been contacting small businesses since mid-February and has come away with the view that many are cash-strapped and riding out the recession, said Corley, 47. Efforts to provide price quotes to 100,000 businesses will go through May 22, the end of National Small Business Week.

Independently owned companies that have fewer than 500 workers employ about half of all private-sector employees and pay nearly 45 percent of total U.S. private payroll, according to the Small Business Administration. Sam’s targets companies with 5 to 10 employees, spokeswoman Susan Koehler said.

Coffee Cups

For example, a real estate office in Tulsa, Oklahoma, was paying 5 cents apiece for 12-ounce foam coffee cups, Corley said. Sam’s price was 2 cents, helping the company save more than $1,300 a year, she said. A restaurant in Prescott Village, Arizona, will save $2,475.66 a year buying 4.5-ounce chicken breast fillets from Sam’s, she said.

As people dine in more, restaurants are among the hardest- hit small businesses, Corley said. Some have stopped paying extra for Sam’s to deliver food and other supplies, she said.

“They are coming in more often and they’re buying less each trip,” Corley said. “They are trying to manage cash. They’re struggling to stay in business.”

The findings by Sam’s, which attracts more than 600,000 small-business owners and employees a day to its 600 U.S. stores, bolster the view that the recession won’t bottom for another few months, said Adam York, an economist for Wachovia Corp. in Charlotte, North Carolina.

Wal-Mart advanced $1.98, or 4.1 percent, to $50.45 at 4 p.m. in New York Stock Exchange composite trading. The stock has slumped 10 percent this year.

Car Dealers, Restaurants

Retail sales in the U.S. unexpectedly fell 1.1 percent in March as soaring job losses forced consumers to pull back. Car dealers, electronics stores and restaurants led the decline, the Commerce Department said April 14.

“No business, small or large, is escaping this downturn,” York said April 14 in a telephone interview.

Staples Inc., the largest office-supply retailer, also is targeting small businesses and people who work at home, said Don LeBlanc, senior vice president of marketing strategy. It offered free tune-ups of personal computers March 2 through April 4, waiving its normal charge of $29.99 for customers seeking to postpone buying a new machine.

From April 26 through the end of May, the Framingham, Massachusetts-based company will take 50 percent off the price of boxes of printer paper, a small-business staple, in an annual promotion.

‘Belt-Tightening’

Sam’s generated $46.9 billion in revenue in the 12 months through Jan. 31, trailing Costco Wholesale Corp., the biggest U.S. warehouse-club chain, which had sales of $71 billion last year excluding membership fees.

Costco customers are spending less on discretionary items, such as coffee makers and other small appliances, sporting goods and lawn and garden items, Bob Nelson, a spokesman for the Issaquah, Washington-based company, said in an April 23 interview.

Costco routinely contacts small businesses, both existing and potential members, and isn’t taking special steps related to the recession, Nelson said.

“Not only are small businesses not expanding, they are also laying off workers,” said Chad Moutray, chief economist and director of economic research in the U.S. Small Business Administration’s Office of Advocacy in Washington. “You’re seeing a lot of belt-tightening.”

Daycare Centers

Some daycare centers are buying less as parents lose jobs and stay at home with their children, Sam’s Corley said. Churches, which buy office and cleaning supplies and food, are struggling because of declining donations, she said.

Other businesses are growing, she said. Automotive shops are doing repairs for people keeping their cars longer and real estate offices are benefiting from lower mortgage rates. Federal stimulus funds for road building and other infrastructure may create jobs and, in turn, help convenience-store sales, she said.

At Sam’s, employees have learned to call businesses before visiting them.

“In these times, you don’t know if that prospect is actually still in business,” Corley said. “A lot of them aren’t.”

To contact the reporter on this story: Chris Burritt in Greensboro, North Carolina, at 1348 or cburritt@bloomberg.net.

Last Updated: April 29, 2009 16:19 EDT