Warehouse Clubs Reign in January Sales

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Feb 08, 2002
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Warehouse club chains proved standouts in January.

Costco Wholesale Corp. (COST — NASDAQ) posted a 7 percent jump in same-store sales versus the previous year.

The Sam’s Club division of Wal-Mart also showed a 7 percent increase in same-store sales and a 12 percent lift in total club sales to $2.1 billion.

Natick, MA-based BJ’s Wholesale Club, Inc. (NYSE:BJ) reported that its sales for January increased by 8.9 percent to $364.3 million from $334.7 million in January 2001. Sales for the fourth quarter rose 9.3 percent to $1.5 billion and totaled $5.2 billion for the fiscal year ended February 2, 2002, an increase of 8.6 percent over 2001. BJ’s comparable club sales increased by 2.7 percent for the month of January and by 3.6 percent for the year.

Moderator Comment: What are the relative strengths and weaknesses of each of the three major warehouse club chains?

It seems like a very long time ago that FMI was releasing the Kurt Salmon report on Efficient Consumer Response (ECR). For those who do not (or choose not to) remember, the ECR movement was largely in response to the perceived business threat that warehouse clubs posed to traditional grocery operators.

Industry gurus were tossing around words like survival as though the ascendance of clubs was an inexorable movement. Little wonder that ECR came to mean Every Consultant’s Retirement to the more jaded within the business.

Using the keen 20/20 vision that comes with hindsight, it is clear that the warehouse clubs did not conquer the world as predicted by those now enjoying their retirement years in Boca Raton or Scottsdale. The format remains strong, however, and all three players are poised for future growth. [George
Anderson – Moderator
]

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