Dive Brief:
- BJ’s Wholesale Club recorded $3.65 billion in sales during the third quarter, a 15.7% increase compared with the same period in 2019, the warehouse operator reported Thursday. Digital sales grew approximately 200% year-over-year.
- Comparable-store grocery sales at BJ’s increased by 19% year-over year, ahead of the overall 18.5% increase in comp sales the chain posted, Chief Financial and Administrative Officer Bob Eddy said Thursday during an earnings call.
- BJ’s Q3 results highlight the company's favorable positioning as shoppers consolidate their trips, though the retailer's grocery sales growth has begun to slow.
Dive Insight:
The results BJ’s reported put it in the company of other retailers that have also seen some air come out of their grocery sales in recent months. The chain’s 19% increase in comps for its grocery division compares with the 25% rate it posted during the second quarter.
Grocers including Kroger and Albertsons have also seen their ID sales subside as the pandemic has worn on. On Thursday, Natural Grocers reported that comp store sales growth for the fourth quarter declined to 13.2% from 15.5% during the third quarter even as the grocer hit a record $1 billion in net sales during fiscal year 2020.
That’s not to say BJ’s grocery business doesn’t remain robust. The company’s perishables business grew two times as fast as the overall market, while its non-edible grocery sales grew eight times faster than the market as a whole, CEO Lee Delaney said during the earnings call.
BJ’s saw particular strength in sales of fresh meat, frozen meals and fresh produce, Eddy said during the call. Paper products and cleaning supplies were also strong sellers, while sales of health and beauty items outpaced the rate reported by the chain’s competitors by a factor of 20.
“Given the current trends in the public health crisis, we believe that the push toward food at home will remain robust for Q4 and well into the next year,” Eddy said. “We also believe that with the election behind us, a new stimulus package may have the potential to gain more momentum in Washington. Both of those factors should drive our business even more.”
Shoppers also signed up for memberships at an accelerated pace during Q3. BJ’s added 630,000 net new members, compared with the 200,000 to 250,000 net increase in membership BJ’s has seen in previous years, according to Eddy.
Delaney said BJ’s has adjusted its grocery assortment toward healthier options to satisfy consumers at a time when people are eating at home more than in the past, and has put a particular focus on reaching younger shoppers.
“As we look at the members that spend the most, it’ll tend to be the family with three or four teenage children in the house who are just eating you out of house and home, but to get them earlier, we need to market to them and make sure that our assortment is relevant,” Delaney said.
