- Business Insider/Jessica Tyler
- Costco, Sam’s Club, and BJ’s are the three biggest warehouse club chains in the United States. These stores offer paying members discounts on items bought in bulk.
- The nature of these stores means that members are less likely to make frequent trips there.
- BJ’s, however, has a larger fresh-food section than its rivals and offers a wider selection of smaller items, which analysts say drives more frequent visits to its stores.
The very nature of their business means that customers don’t need to come here for weekly visits. These aren’t your average grocery stores and, most likely, you don’t need to buy a box containing 30 bags of chips or a five-pound bag of coffee every week. These stores are designed to serve the customer who wants to stock on up on non-perishable items and make monthly or fortnightly visits to the store.
BJ’s, however, is closing the gap somewhat between a grocery store and a warehouse store. This predominantly East Coast-based chain offers more fresh food and non-bulk items than its competitors.
According to a recent note from Nomura, its fresh food section accounts for 27% of its sales. At Costco, for comparison, this department accounts for 16% of sales.
A larger selection of fresh or perishable food and smaller items drives more traffic to its stores. Around 20% of BJ’s members make weekly visits, the Nomura analysts wrote.
Once in the store, these members are also more likely to make other purchases.
The three warehouse clubs use a similar tactic with their gas stations. As gas purchases tend to be recurring, having gas stations attached to stores is an effective way to drive foot traffic and encourage members to visit the store when they fill up their car’s tank. It’s also a way to attract members and keep existing ones loyal.