All three warehouse club leaders have been expanding in recent years, along a variety of measurements.
Warehouse clubs collectively have grown at a compound annual growth rate of 6 percent since 2007, according to estimates from financial intelligence firm CFRA Research.
Wholesale club growth can be attributed to new openings, growing membership, and movement from basic to premier subscription tiers. Expanded offerings of products and services and more robust ecommerce operations are also contributing.
All three chains have been expanding their physical presence and are looking to add more locations going forward.
Costco Wholesale Corporation BB #:150902 opened close to 25 new stores globally in 2023, including 15 in the United States, and hopes to open another 25 to 30 locations globally per year over the next decade. It has historically opened about 15 stores a year.
Sam’s Club BB #:140368 to open 30 new stores over the next five years, marking its first expansion in nearly a decade. In 2018 it closed 63 locations and with no new store openings since 2017. The new locations are mostly in suburban areas where it currently has few or no clubs, and stores are about 20,000 square feet bigger to accommodate more services and amenities.
In 2023, BJ’s Wholesale Club, Inc., BB #:162875 opened two stores in Tennessee (its first in that state), one in Alabama (also a first), two in Florida, and one each in Georgia, New York, and Ohio, bringing its store count to 239 in 20 states. Additional stores are slated for 2024 to continue expanding south and west of its Northeastern base.
In another indicator of the channel’s health, all three retailers attracted higher food traffic in each of the four months from April to July 2023 than during those same months in prepandemic 2019, according to data from Placer.ai.
In July 2023, for example, Costco saw monthly visits up 16.4 percent compared to July 2019; BJ’s was up 11 percent; and Sam’s Club was up 14.9 percent.
Memberships and renewal rates are also on the rise. All three leaders in the club store space saw renewal rates in 2023 hit record levels: 92.7 percent in the United States and Canada for Costco, more than 90 percent for Sam’s Club, and 90 percent for BJ’s (up 3 percent since 2018).
As for total memberships, Costco saw a year-over-year increase of 7.9 percent in paid household members and a bump of 7.6 percent in total members. Sam’s Club has seen its membership grow almost 30 percent in three years with an increase in “membership and other income” of 7 percent in fiscal 2023 (following growth of 13.1 percent in 2022).
Membership fee income for BJ’s was up 5.9 percent in the first nine months of fiscal 2023 ending October 29, versus net sales growth of 1.5 percent during the period.
Wholesale clubs are also successfully converting subscribers to premium memberships. Costco saw an increase of 3 percent in Executive Members in the fourth quarter of fiscal 2023 ending September; these premium members account for 45 percent of total members and 73 percent of global sales.
Sam’s Club membership income increases were also driven in part by a growing number of Plus members, along with new member signups.
This is an excerpt from the feature story from the March/April 2024 issue of Produce Blueprints Magazine. Click here to read the whole issue.
Editor’s Note: A previous version of this story had incorrect traffic figures.
