The 2021 Retail Radicals winners represent different sectors of the retail industry and based on their strategic initiatives and innovations, these companies have outpaced the market in delivering key performance metrics during an extremely difficult and challenging year. BJs became an essential retailer during the pandemic and overdelivered in making sure their members were provided for with all-important products to help cope during a stressful year.
[callout]Just two years ago, BJ\’s Wholesale Club was merely an afterthought for most industry observers who follow the warehouse club sector. With a fraction of the revenue of industry giants Costco and Sam\’s Club and a slow growth rate, BJ\’s was easy to overlook. But not so fast.[/callout]
Just two years ago, BJ\’s Wholesale Club was merely an afterthought for most industry observers who follow the warehouse club sector. With a fraction of the revenue of industry giants Costco and Sam\’s Club and a slow growth rate, BJ\’s was easy to overlook. But not so fast.
BJ\’s changed the narrative in dramatic fashion during 2020. When the pandemic struck early in the year, Lee Delaney had just taken the reins as CEO, following a two-decade career at consulting giant Bain & Co. and four years at BJ\’s in positions of increasing responsibility.
Under Delaney\’s leadership, BJ\’s turned its comparatively small size (relative to Costco and Walmart-owned Sam\’s Club) into a competitive advantage. The company proved nimbler than its peers, rapidly rolling out new capabilities to make shopping safer and more convenient for its members.
Prior to the pandemic, Delaney had already spearheaded investments in omnichannel capabilities, including buy online, pick up in club (BOPIC) and same-day delivery options for ecommerce orders. As the pandemic began to impact consumer behavior in early 2020, the company quickly began testing curbside pickup. It also launched a test of making perishables available for BOPIC orders in some of its clubs.
By the fall of 2020, BJ\’s had rolled out curbside pickup including both fresh and frozen items across the entire chain. The warehouse club\’s omnichannel offerings quickly became popular with members. Digitally enabled sales surpassed $700 million in fiscal 2020, up from an annual pace of approximately $140 million at the time of the company\’s IPO in mid-2018.
As a result, BJ\’s revenue rose 17 percent last year, reaching $15.43 billion. That was nearly double the pace of growth at Sam\’s Club, which recorded a 9 percent sales increase. It also comfortably exceeded Costco\’s 13 percent sales growth over the same period. Excluding gasoline sales (which tend to be quite volatile), BJ\’s reported a 21.3 percent increase in comparable club sales for fiscal 2020. Moreover, adjusted net income more than doubled compared to 2019, reaching $429 million.
Tragically, Lee Delaney passed away unexpectedly in April 2021 at the age of 49. But the company remains in capable hands, as long-time BJ\’s Wholesale Club CFO Bob Eddy has shifted over to the CEO role. Thanks to its improved operating model, BJ\’s is ready to accelerate its expansion over the next few years. With roughly 220 clubs in the U.S., compared to nearly 600 each for Costco and Sam\’s Club, BJ\’s has plenty of white space to open new locations.
“BJ’s longstanding focus on customer service has developed a loyal following. Leveraging technology to transform their operating model and bring new services like BOPIC to their customer base has created impressive omnichannel growth. Always looking for new ways to engage and delight their customers, BJ’s is disrupting the warehouse club model, just what we would expect from a Retail Radical.”
Matt Laukaitis, EVP and Global GM, SAP Consumer Industries.
BJ\’s impressive transformation during 2020 gives it a well-earned place among The Robin Report Retail Radicals.