Print

Email story

Comment

Email editor

BJ's, rival of Sam's, Costco, is coming

The country's third-biggest warehouse chain will be opening a store in New Tampa this summer. But it's not completely like its competitors.

By MARK ALBRIGHT
Published May 18, 2006

TAMPA - BJ's Wholesale Club, the third-biggest warehouse membership club, opens its first store in the Tampa Bay area this summer.

The chain has begun hiring 145 workers to staff the store that will be located at 6290 Commerce Palms Drive in New Tampa, near Bruce B. Downs Boulevard and Interstate 75. The human resources staff set up shop for job applicants at the Holiday Inn Express, 8310 Galbraith Road in Tampa.

Named after Beverly Jean, one of the founders' daughters, BJ's second-biggest market behind New England is Florida, but the chain until now has been no closer than Sarasota and Kissimmee.

BJ's of Natick, Mass., churned revenues of $8-billion in fiscal 2006. That's only a fraction of the size of rivals Costco Wholesale and Wal-Mart's Sam's Club.

But there are other differences. BJ's is the only club that accepts manufacturers' coupons and virtually all major credit cards. Three-quarters of its members are individuals as opposed to small businesses. It has a greater focus on food - 70 percent of its foods are found in supermarkets - than general merchandise. After a huge growth spurt the past two decades, the warehouse clubs have settled down to filling in existing markets in recent years.

The no-frills operations cut costs by not advertising and sticking with self-service in a Spartan warehouse setting.

The chains offer smaller selections of only the most commonly purchased foods. Each BJ's has about 7,500 products, compared with 30,000 in a typical supermarket or 125,000 in a Wal-Mart Supercenter.

In addition, BJ's stocks a constantly changing, narrow selection of about 3,500 general merchandise products.

By selling huge volumes of the most commonly purchased goods, the clubs can sell virtually all of their inventory before paying a manufacturer for it.

Prices are low because all the profits come from the membership fee (typically $45 a year at BJ's). Prices are marked up only to cover the expenses of running the stores.

Don't believe it? Consider this: BJ's net income in the most recent fiscal year was $128-million. The company generated $165-million from membership fees during the same period.

In addition to a discount gas station, the Tampa BJ's will offer tires, travel services, optical wear, wireless service and some home installation.

[Last modified May 18, 2006, 06:25:45]