For years, Costco and Sam’s Club have dominated warehouse club retail, where members pay an annual fee to buy large quantities of goods at low prices. But a much smaller warehouse chain has gained steam as shoppers load up on groceries in the pandemic: BJ’s Wholesale Club.
The chain, which has more than 200 no-frills, self-service warehouse stores featuring high ceilings and pallets of goods, grew sales at stores open for at least one year 24.2% to $3.9 billion during its latest quarter ended Aug. 1 — a faster clip than the growth rates reported by Costco and Walmart-owned Sam’s Club in the same period. BJ’s (BJ) said its “digitally enabled sales,” including same-day delivery through Instacart and curbside pickup, grew by more than 300% last quarter.
BJ’s success during the pandemic has attracted the attention of investors, who have driven its stock up more than 70% so far this year, outpacing Costco (COST), Walmart (WMT) and even Amazon (AMZN).
BJ’s experienced sluggish growth prior to the pandemic. Sales ticked up around 3% in the past two years. But the chain has benefited from two key pandemic trends in retail — consumers eating more meals at home as restaurants closed and consumers buying in bulk when they shopped.