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NATICK, Mass. -- BJ's Wholesale Club has always been in a category of its own.
The smallest of the three major membership club chains, BJ's was founded by a company previously known as Zayre Corp. 20 years ago. It has evolved and grown at its own pace -- sometimes following in the footsteps of its rivals and other times stepping out ahead.
Although its stores' aisles are stacked high, warehouse-style, with bulk packages of groceries, the company, based here, has long been more consumer-oriented and more food-oriented than the other warehouse chains. It garners about 75% of its memberships from individuals. Lately, it has been refining that mission by improving its perishables and taking other measures to target supermarket customers specifically.
It operates 151 stores from Maine to Florida, generating an average of $45 million in sales per store, including $49.3 million at its larger clubs and about $24 million at its smaller facilities.
Food and sundries accounted for about 70% of the $6.6 billion in sales BJ's tallied last year. BJ's estimated that its best members spend about $500 per year on groceries in its stores and another $1,500 at supermarkets.
While Issaquah, Wash.-based Costco Wholesale, the largest of the club chains in terms of sales, and Bentonville, Ark.-based Sam's Club, the largest of the three in terms of number of stores, grew to become national players through acquisition, BJ's has largely stuck to its strategy of concentrating its presence along the East Coast, with the exception of a failed foray into the Chicago market in the late 1980s.
New Concept
The latest development in its business plan is not so much a radical change in strategy as it is a throwback to the original strategy of the club stores: serving small businesses. Last month, the company unveiled its blueprint for a new banner called ProFoods that will serve small food-service operators exclusively. The first two outlets are slated to open later this year in New York City.
At about half the size of traditional BJ's stores, ProFoods will be located in industrial areas, seeking to provide restaurant supplies for small food-service operators in what it described as an $80 billion niche. Profit margins are expected to be better than those of BJ's...