BJ’s Wholesale Club recently announced its plans to open four new clubs in the Southeast and one in the Midwest in an effort to expand its presence in the competitive membership warehouse market. These new stores are scheduled to open this fiscal year in various locations including Maryville, Tennessee; Myrtle Beach, South Carolina; Palm Coast and West Palm Beach, Florida; and Carmel, Indiana. BJ’s also intends to open a total of twelve new clubs this fiscal year, with one club already confirmed for Louisville, Kentucky.
As a smaller rival to industry giants like Costco and Walmart-owned Sam’s Club, BJ’s faces tough competition in the retail market. Sam’s Club recently announced its own plans to open more than 30 new stores in the U.S. over a five-year period, while Costco anticipates opening 30 new clubs globally in its fiscal year. The rise of value-focused retailers such as off-price chains has driven store growth in the U.S., with stores like Dollar General, Burlington, and Aldi leading the way.
While BJ’s has a smaller reach compared to its competitors, the retailer has been in growth mode since 2016. Most of BJ’s clubs are concentrated on the East Coast, but the company has made efforts to break into new markets over the past few years. BJ’s has opened 27 new clubs and entered four new states since 2016, with plans to open 10 to 12 clubs each year going forward. The retailer aims to attract customers with its emphasis on grocery offerings, with a wide selection of products including fridge staples, bulk items, and smaller grocery items.
BJ’s typical customer has an average household income of between $75,000 and $100,000. In new markets that BJ’s has entered, the retailer has been able to attract members who already belong to another club. The company’s focus on offering affordable prices on everyday items appeals to budget-conscious shoppers who are looking to save money on their grocery purchases.
BJ’s recently announced that it expects modest growth for the full year, with comparable club sales projected to increase by 1% to 2% year over year, excluding gas sales. The company anticipates adjusted earnings per share to range from $3.75 to $4.00, with the lower end of that falling below the $3.96 reported for the most recent fiscal year. Despite these projections, BJ’s shares have seen a positive performance this year, climbing more than 12% compared to the S&P 500’s gains of over 9%.
BJ’s Wholesale Club’s expansion into new markets reflects the company’s commitment to growth and attracting a wider customer base. By focusing on offering affordable prices, a wide selection of products, and emphasizing grocery offerings, BJ’s aims to differentiate itself in a competitive retail landscape. With a clear growth strategy and a focus on meeting the needs of budget-conscious shoppers, BJ’s Wholesale Club is poised for continued success in the evolving retail market.