Starting January 1, 2025, BJ's Wholesale Club will increase the cost of its membership fees for the first time since 2018, affecting both new and existing members. The basic annual membership fee will rise by $5, bringing it to $60, and the more premium Club+ membership will see a $10 hike, reaching $120. This adjustment reflects BJ’s commitment to enhancing its offerings and maintaining competitiveness as it joins its rival Costco, which similarly raised its fees earlier this year.
According to BJ's release, the corporation aims to invest even more significantly in its value proposition for its growing member base, which currently stands at approximately 7.5 million. These adjustments will come after Costco’s own fee hike implemented on September 1, 2024, marking its first increase since 2017, and following Sam’s Club’s previous increase.
Bob Eddy, BJ's Chairman and CEO, commented on the decision, noting, "Since the last membership fee increase, the company has transformed its business with a relentless focus on delivering value to members. Today’s announcement allows the company to invest in an even stronger value proposition for its 7.5 million member base, which continues to grow." Such rhetoric indicates the company's strategy to reinforce its resilience amid inflation and competitive pressures from larger players.
This increase is expected as BJ's membership fee income climbed by 8.4% year-over-year to $115 million, as disclosed during the third quarter earnings report. Seeing substantial growth, the announcement aligns well with BJ's business strategy, which is centered on its distinct offerings compared to larger warehouse giants. The company not only boasts competitive pricing but also provides unique benefits to its members like cashback rewards and fuel discounts, especially with its Club+ tier.
Alongside these fee changes, BJ's plans to introduce new benefits for its Club+ members, particularly for those holding the BJ’s One+ Mastercard. These members will enjoy two free same-day deliveries on eligible orders of at least $50 during each annual membership period. This new feature, also launching on January 1, 2025, demonstrates BJ's intent to add more value to its existing membership plans, making them more appealing to consumers focused on convenience.
Financially, BJ's has reported strong growth, with total revenues rising to $5.1 billion from $4.9 billion over the year. Comparable club sales increased by 1.5%, demonstrating the company's healthy operational performance. When excluding gasoline sales from those comparisons, sales have surged even more—up 3.8%. Online sales have also seen impressive growth of 30%, highlighting the shift toward digital retail strategies.
The membership fee increase fosters confidence among stakeholders with the retailer emphasizing its commitment to long-term growth and shareholder value by focusing on strategic priorities. Laura Felice, BJ's Executive Vice President and Chief Financial Officer, shared confidence about the company’s path forward, saying, "We expect fourth-quarter fiscal 2024 comparable-club sales, excluding fuel sales, to increase 2.5% to 3.0% year-over-year, bringing full-year fiscal 2024 growth to between 2.3% and 2.4%."
Currently, BJ’s operates over 240 clubs and 180 BJ’s Gas locations across 20 states, managing to navigate the difficult retail environment effectively. With this new membership fee structure and enhancements to their services, BJ's looks poised to continue capturing market share as consumers search for value-driven shopping experiences.
The strategic positioning of BJ’s membership fee hikes showcases the broader trend within the retail wholesale market, as major players adapt to inflationary pressures and attempts to secure customer loyalty. Continued competition from Costco and others means BJ’s must not only raise prices but also substantively improve what it offers to members to justify the increases.
