BJ’s Wholesale Club is making headlines by announcing its first membership fee increase in seven years. This decision, shared amidst the release of its third-quarter financial results, indicates the retailer’s confidence in its membership growth and overall performance. BJ’s has established a significant milestone, boasting 7.5 million members. This surge in membership has bolstered their membership fee income, which rose by 8.4% year-over-year to $115 million for the quarter ending November 2, 2024.
Starting January 1, 2025, traditional membership fees will increase by $5, bringing the total annual cost to $60. Additionally, the Club+ membership fee will see a $10 increase, adjusting the annual fee to $120. This price adjustment aims to empower BJ’s to enhance its value proposition for its growing base of 7.5 million members.
In tandem with the fee increase, BJ’s will introduce a new delivery benefit for Club+ members, including those holding the BJ’s One+ Mastercard. These members will receive two free same-day deliveries on eligible orders of $50 or more each year. This incentive not only makes the membership more attractive but also aligns with the growing trend of convenience in retail shopping.
BJ’s reported a rise in total comparable-club sales of 1.5%, with a more impressive 3.8% growth when excluding gasoline sales. The retailer noted a remarkable 30% increase in digitally enabled comparable sales, marking an extraordinary two-year stacked growth of 47%. This digital transformation reflects a broader trend in the retail sector, where omnichannel strategies play a crucial role in driving sales.
Gross profit for the third quarter rose to $975.5 million from $902.5 million in fiscal 2023, contributing to an increase in the merchandise gross margin rate, which rose by 20 basis points, excluding gasoline sales and membership fees. While selling, general, and administrative expenses increased to $733.6 million—up from $697.1 million last year—BJ’s net income surged to $155.7 million, compared to $130.5 million the previous year. Adjusted EBITDA saw a healthy increase of 13.5% to $308.3 million.
BJ’s ongoing expansion efforts are also noteworthy, having opened three new club locations and four new gas stations during the third quarter. This strategy reflects a commitment to accessibility and service, which are critical factors in retaining and growing their membership base.
Bob Eddy, BJ’s chairman and CEO, emphasized the firm’s successful execution and the “great value” offered to members, stating that the results demonstrate their value proposition resonates strongly in both existing and new markets. Laura Felice, EVP and CFO, indicated optimism regarding the company’s growth trajectory, projecting fourth-quarter fiscal 2024 comparable-club sales (excluding gasoline) to rise between 2.5% and 3.0% year-over-year.
BJ’s ongoing transformation and growth are evident as it navigates through a competitive landscape increasingly influenced by digital strategies and consumer preferences. The decision to raise membership fees, coupled with the introduction of enhanced benefits, positions BJ’s to maintain its competitive edge in the club retail sector.
The company’s proactive approach sets a precedent for how retailers can adapt to changing market conditions while continuing to provide value to their members. As they capitalize on membership growth and digital advancements, BJ’s Wholesale Club remains an important player in the grocery and retail sectors.
BJ’s currently operates over 240 clubs and boasts more than 180 BJ’s Gas locations across 20 states. Recognized as No. 30 on Progressive Grocer’s 2024 list of the top food and consumables retailers in North America, BJ’s commitment to growth and member satisfaction is likely to continue shaping its future strategies as the retail landscape evolves.
