BJ’s Wholesale, Costco and Sam’s rivals to open clubs in Southeast | Wilnesh News

BJ’s Wholesale Club The company said Wednesday it will open four clubs in the Southeast and one in the Midwest this year as it tries to expand in the competitive membership warehouse market and attract members from other parts of the country.

New stores will open this fiscal year in Maryville, Tennessee; Myrtle Beach, South Carolina; Palm Coast and West Palm Beach, Florida; and Carmel, Indiana. The company plans to open more than a dozen new clubs this fiscal year, including one already announced in Louisville, Kentucky.

smaller competitors costco and WalmartSam’s Club is the latest warehouse club to share expansion goals. Sam’s Club said in early 2023 that it would open more than 30 stores in the United States within five years.Earlier this month, Costco said on an earnings call that it expected to open There are 30 new clubs globally this financial year, including two relocating clubs.Plans to launch 22 aircraft in the United States

Their actions are Value-focused retailers such as discount chains are driving U.S. store growth, according to retail consultancy Coresight Research. Track openings and closings.

Likewise, club stores also resonate with budget-conscious shoppers because they emphasize getting more for less.

BJ’s has a smaller presence than its club rivals. Most of the Marlborough, MA-based retailer clubs are concentrated on the East Coast. As of Sept. 3, the end of the fiscal year, Costco had clubs in 46 states, Washington, D.C., and Puerto Rico, and its expansion will bring it to 21 states. Sam’s Club has stores in 44 states and Puerto Rico.

However, BJ’s has been in growth mode since 2016, when the company stepped up efforts to break into new markets, said Bill Werner, BJ’s executive vice president of strategy and development. In the past five years, it has opened 27 new clubs and entered four new states: Tennessee, Alabama, Indiana and Michigan. It opened seven new clubs last financial year.

Werner said the company plans to open 10 to 12 clubs a year going forward.

However, BJ’s must convince customers to buy memberships, which can be a challenge if it’s a second or third club in a customer’s backyard.

Evercore ISI retail analyst Greg Melich said BJ’s stands out because of its focus on groceries. It has nearly twice as many items as its club rivals, including more refrigerator staples like fruits, vegetables and deli meats. In addition to carrying bulky laundry detergent and paper towels, it also sells smaller items like a gallon of milk or a loaf of bread that are suitable for weekly grocery shopping.

“You might be able to buy a piece of cheese that’s less than two pounds,” Melich said.

He said BJ’s would be better off focusing on grabbing sales from regional and national supermarkets like Publix and Kroger.

“It would be a mistake if BJ’s tried to be Costco,” he said. “That’s not the point. The point is there are a lot of people in a lot of markets who want to buy something cheaper than at their local grocery store.”

BJ’s Werner said the company’s typical customer has an average household income between $75,000 and $100,000. He added that in new markets BJ’s enters, it is able to attract members who already belong to other clubs.

Earlier this month, BJ’s said it expected modest growth for the full year. The retailer said it expects comparable club sales to increase 1% to 2% annually (excluding gas sales). The company said adjusted earnings per share will be in a range of $3.75 to $4.00, with the lower end lower than the $3.96 reported in its most recent fiscal year.

As of Tuesday’s close, BJ shares were up more than 12% this year. The gain outpaced the S&P 500’s gain of more than 9%.