BJ's Wholesale Club is shaking things up for its members as they prepare to raise subscription fees for the first time since 2018. This increase isn’t just about squeezing extra dollars from consumers; it's set against the backdrop of significant investments the company has made to improve customer experience.
Starting January 1, 2025, the cost for the standard Club membership will jump from $55 to $60, marking a $5 annual increase. Meanwhile, the more premium Club+ membership will see its fees rise by $10, bringing the total to $120. This announcement came during BJ's quarterly earnings call on November 21, where the company highlighted its commitment to enhancing member value.
The fee hike follows BJ's strategic move to boost its membership offerings, which now includes new perks for Club+ members. Beginning next year, these members will be eligible for two free same-day deliveries each year on orders of $50 or more. With the regular delivery fee standing at $14.99, this perk is expected to bring savings and convenience to repeat customers.
Bob Eddy, BJ’s chairman and CEO, stated, “This new benefit alone is worth about three times the fee increase for our plus members.” This sentiment reflects the company’s strategy of focusing on providing enhanced value to its growing membership base, which now stands at 7.5 million.
BJ’s has been proactive about investing heavily across its operations since its last fee increase. These investments include improving labor conditions, diversifying product selection, and enhancing overall member benefits. The positive reception from customers, reflected by the company’s growth, has led executives to believe this is the right time to adjust membership rates.
"Since the last membership fee increase, the company has transformed its business with a relentless focus on delivering value to members," BJ's noted in its earnings report. This statement underpins their approach to maintaining and growing their customer base, particularly amid stiff competition from rivals like Costco.
BJ’s fee hike looks to align with recent trends observed at Costco, which raised its membership rates just months prior. Costco’s basic membership experienced an increase from $60 to $65 and its higher-tier membership now costs $130, reflecting larger market behaviors influenced by inflation and changing consumer expectations.
A key point for shoppers is the motivation behind this increase. During the earnings call, CFO Gary Millerchip emphasized the timing of BJ's adjustments, showing strategic consideration as consumer sentiment fluctuates. He indicated, "There's always a little risk from a renewal rate perspective when you raise the fee. But I would expect this time around, the risk will be significantly less than the last time we raised fees due to the positive momentum of our business.”
With their latest fee adjustments, BJ's is not merely attempting to increase revenue; rather, they aim to bolster their value proposition. Customers willing to pay the new fees can expect enhanced benefits as the company commits to providing even greater value and services.
These plans come on the heels of BJ's expansion endeavors. With 247 clubs spread across 20 states, including 30 locations in Massachusetts alone, the company is strategically positioned to meet the demands of the consumer market. This year, BJ's has also opened three new clubs and four gas stations, which brings more convenience to members.
