In its recent third-quarter earnings call, BJ’s Wholesale Club revealed substantial growth in its grocery market share, particularly in the perishable segments. The company’s focus on fresh food, part of its Fresh 2.0 initiative, has shown promising results, prompting further investment and strategy refinement.
Robert W. Eddy, BJ’s president and CEO, highlighted that the Fresh 2.0 initiative was founded upon data that revealed significant customer engagement with fresh products. According to Eddy, members who prioritize fresh shopping at BJ’s make visits at least once a week and tend to fill larger baskets—approximately 30% more—than those who do not frequently purchase fresh items. This behavior translates into a spending difference; fresh-focused shoppers reportedly spend eight times more annually compared to their non-fresh counterparts.
To bolster its fresh offerings, BJ’s has undertaken several strategic steps over the past year. One of the key initiatives has been to enhance its produce assortment. By expanding vendor partnerships, BJ’s has increased stock levels and introduced seasonal produce items. This ensures that members find a wider variety of high-quality options when they shop.
A tangible component of this strategy has been the installation of stand-alone cooler stations at store entrances. These displays spotlight quality produce, aiming to attract customers as they enter the store. Eddy mentioned that this approach is crucial in establishing BJ’s as a leading destination for fresh food. In addition, the company implemented a systematic fresh training program across its clubs, ensuring that staff are knowledgeable and effective in promoting fresh products.
The impact of these initiatives has already manifested in BJ’s financial results. The company reported that perishables drove comparable sales growth, with particular strength in dairy, meat, and produce sectors. In the third quarter, produce categories exhibited low double-digit growth, primarily driven by increased unit volumes. Moreover, the company’s Net Promoter Score (NPS) has notably improved in the fresh category over the last two quarters, indicating enhanced customer satisfaction and loyalty.
BJ’s overall third-quarter performance reflects this positive trend. Comparable-club sales increased by 1.5% year-over-year, with a standout exclusion of gasoline sales, showcasing a 3.8% rise driven by stronger customer traffic. Digitally enabled comparable sales surged by 30%, contributing to an impressive two-year stacked growth of 47%. Furthermore, membership fee income climbed by 8.4% year-over-year, amounting to $115 million, highlighting a growing base of committed customers.
The business model employed by BJ’s, which places emphasis on fresh products and enhanced customer experience, suggests a significant shift in consumer expectations. Grocery shoppers today are increasingly discerning about the quality and freshness of their food. This shift requires retailers to adapt their strategies accordingly. By responding to consumer demand for quality fresh produce and other perishables, BJ’s is not only fulfilling customer needs but also securing its place in a competitive marketplace.
Marlborough, Massachusetts-based BJ’s operates over 240 clubs and 180-plus gas stations across 20 states. Recognition in the industry is evident as the company ranks No. 30 on The PG 100, Progressive Grocer’s list of the top food and consumables retailers in North America.
As BJ’s continues to refine its strategy to enhance the freshness and quality of its offerings, it sets an example for other retailers to consider innovative ways to meet changing consumer demands. The success of Fresh 2.0 looks promising for BJ’s future as loyal members contribute to sustained growth.
