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Part
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Bjs Wholesale Club Inc.; Company Analysis
BJ's Wholesale Club was founded in 1984. Currently, the company is growing and is targeting middle-class families.
BJ's Wholesale Club — overview
- BJ's Wholesale Club is a warehouse club that operates on the East Coast of the United States. The company has 216 stores.
- Lee Delaney is the President of the company, whose supervisory duties also include marketing, among other things. Donna Noa is the VP of marketing at BJ's Wholesale Club.
- It is unclear who the company's agency of record is, although the company worked with Terri & Sandy to develop an ad campaign in 2019.
Company history
- BJ's Wholesale Club was founded in 1984 by Mervyn Weich, who was also the first president of the company. At first, this company was a part of Zayre, which was a discount department store, and the 20th century warehouse giant Waban, before becoming an independent company.
- In the beginning, the company has faced fierce competition from its competitors Sam's Club and Costco, but sustained. By the end of 1988, the warehouse chain already had 22 stores in 11 states. When entering the Midwest in 1991, it faced issues and retreated two years later.
- The company hasn't always been profitable as desired, as it faced issues in 1992, when it didn't reach the expected results. As a consequence, the CEO of the company Waban was replaced.
- By the end of 1993, the chain had stores across the east coast.
- The company drove down expenses by using cross-docking facilities for acquisition of goods. This enabled it to charge manufacturers a lower fee and retain lower inventory levels.
- The company operated at a satisfactory level until today, going private in 2011 and then again public in 2018.
Company growth
- Comparing BJ's Wholesale Club's 2019 fiscal year results with 2018, it is evident that the company has seen an increase in revenue, income and total sales.
- During the 53 weeks preceding February 3rd, 2018, the company saw $12,754,589 in revenue, while during the 52 weeks ending on February 2nd, 2019, the company saw $13,007,347 in revenue. This is a 2% increase.
- During the same time periods, the company saw a 1.8% increase in net sales, from $12,495,995 in 2017 to $12,724,454 in 2018.
Target audience
- According to BJ's Wholesale Club current CEO Chris Baldwin, his company caters to middle-class working families who want to save money.
- According to RetailDive, this wholesaler is increasingly targeting younger customers.
Key competitive advantages
- BJ's Wholesale Club offers a wider array of grocery stock keeping units than its competitors, which makes it resemble supermarkets while offering cheaper prices.
- It also offers better prices, cheaper membership than Costco and issues discount coupons, which other wholesalers don't do.
Value proposition
- The wholesale club offers low gas prices, digital coupons and cash-back perks for its members.
- Overall, the company claims it offers fresh items, as well as 'real savings', which is the main value proposition of the brand.
Key mergers and acquisitions
- In 2011, after it stopped being a public company, BJ's Wholesale was funded by CVC Capital Partners and Leonard Green & Partners. It was acquired by Beacon Holdings.
- In 2018, the companies sold their stakes and BJ's Wholesale made its second initial public offering.
RESEARCH STRATEGY
The major clients of BJ's Wholesale couldn't be located. To find these, we consulted the company's website. We particularly checked the business membership section of the website, as business owners are likely the major clients of the wholesale chain, but haven't found any relevant information. We were confident this would give us the desired results because companies usually highlight the major clients, as it helps them attract customers. We also checked the company's press releases, but available information focused on internal events.
We then turned to relevant third-party publications, such as RetailDive, Business Insider and CNBC, where we hoped to locate reports on significant clients, such as companies, who are BJ's Wholesale members, but we kept coming across information about mergers, acquisitions and partnerships.
Lastly, we performed a social media scan. We checked the hashtag "#bjswholesale" on Twitter, Instagram and Facebook, as well as its social media profiles on each of the networks. What we hoped to trace this way were posts that announce, mention or show business owners who are shopping in BJ's Warehouse, but all we found were influencers who were paid to appear inside BJ's stores.