BJ's leaning on perishable foods to drive traffic, sales in 2010

Jennifer Negley, Staff Staff, June 23, 2010

Nantucket, Mass. - BJ's Wholesale Club is increasingly counting on its consumable offerings, specifically perishable goods, in 2010 and beyond to drive frequent customer traffic and transactions and grow its overall business.

At the company's presentation during the Jefferies & Co. Inaugural Consumer Conference today, BJ's president and ceo Laura Sen singled out supermarket business as the company's "biggest opportunity for taking market share."
The reason is two-pronged.

"Perishable foods drive member visits. Our goal is to become the primary source for weekly shopping needs," Sen said. "And perishable foods have higher margins than any other category of merchandise sold in our club."

BJ's estimates that the wholesale club industry's share of the $750 billion grocery market in U.S. is "still only about 10%," Sen said. "Outside of wholesale clubs, our primary competitors include supercenters, specialty retailers and supermarkets. And of all BJ's competitors, supermarkets represent our biggest opportunity for taking market share. Based on our operational efficiencies and of course lower prices, our biggest advantage over supermarkets is our significantly lower cost structure."

In addition, she continued, BJ's on average offers shoppers a 30% savings on a basket of like items, as well as a bevy of "treasure hunt" non-food items for added "excitement and fun."

Also in the cards for this year: seven to nine new clubs, including one relocation, and five or six major renovations, which include installation of more refrigeration units as part of the perishable food expansion; and updated staff training and development coupled with an upgraded ecommerce site.


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