BJ’s Wholesale Club, a smaller competitor to Costco and Sam’s Club, has announced plans to expand its presence in the Southeast region of the United States. The company will be opening four new clubs in Maryville, Tennessee; Myrtle Beach, South Carolina; Palm Coast and West Palm Beach, Florida; and Carmel, Indiana. This expansion is part of BJ’s strategy to attract new members and compete in the highly competitive membership warehouse market.
BJ’s is not the only warehouse club looking to expand. Sam’s Club recently announced its plans to open more than 30 stores in the U.S. over the next five years, while Costco expects to open 30 new clubs globally in its fiscal year. These moves come as value-focused retailers, such as off-price chains, are driving store growth in the U.S.
BJ’s currently has a smaller reach compared to its competitors, with most of its clubs concentrated on the East Coast. However, the company has been in growth mode since 2016 and has opened 27 new clubs and entered four new states over the past five years. BJ’s plans to continue opening 10 to 12 clubs each year going forward.
One of BJ’s key selling points is its emphasis on grocery items. The retailer offers nearly double the number of items compared to its competitors, with a focus on fridge staples like fruits, vegetables, and deli meats. Along with bulk household items, BJ’s also sells smaller items like single loaves of bread or gallons of milk that are suited for weekly grocery runs. This emphasis on grocery items sets BJ’s apart from its competitors and allows it to target regional and national supermarkets like Publix and Kroger.
BJ’s typical customer has an average household income of between $75,000 and $100,000. The company has been able to attract members who already belong to another club in the new markets it has entered. BJ’s executive vice president of strategy and development, Bill Werner, believes that BJ’s can differentiate itself by offering affordable prices compared to local grocery stores.
Despite the competitive market, BJ’s has seen modest growth and expects comparable club sales to increase by 1% to 2% year over year, excluding gas sales. The company also expects adjusted earnings per share to range from $3.75 to $4.00 for the full year.
In conclusion, BJ’s Wholesale Club is making strategic moves to expand its presence in the Southeast region of the United States. By focusing on its strengths in grocery items and offering affordable prices, BJ’s aims to attract new members and compete with its larger rivals. With its plans for continued expansion and modest growth expectations, BJ’s is positioning itself as a strong player in the membership warehouse market.
