Warehouse clubs have been growing fast as buying in bulk is a great way to save money and hedge against inflation. For as long as inflation remains an issue, I think this outperformance will continue — although perhaps at a more modest pace as the years progress. As for the robots, they are an interesting addition but Walmart abandoned this after it found it to be a very expensive and complex solution for a relatively simple problem.

Warehouse club customers are very loyal and their low-pricing is perfect for the times. Yes, I do expect to see continued strong performance and growth in the warehouse club category. BJ’s does a lot of things right, but I especially like the way they are thinking about and deploying technology to improve operational efficiency. Using robots to scan product and monitor inventory is an ideal use-case for this technology and the store environment is well suited for it.

Whether or not warehouse club growth can outpace grocery and mass market chains is dependent on being able to meet the needs of the right demographics which, I suspect, are different for warehouse clubs. Being able to stick strictly to the formula will determine success–or eventual closures.

Grocery store decisions are often about proximity-based convenience, so I do think location strategy will play a key role in future growth. I greatly appreciate BJ’s multi-prong tech approach in finding efficiencies, though. They’re thinking about all the right variables, while also recognizing the importance of low prices.

Club stores will have a slight advantage for a year or so, depending on the depth of the macroeconomic inflationary pressure on households. However over the course of five years this advantage will diminish. What club stores will have is continued loyalty to their programs in the meantime. BJ’s are able to lock in lower price rates through bulk purchasing, warehouse style stores, and their annual fees. Customers must see the 25 percent claimed price reduction firsthand and. more importantly, across most of the products they are buying before they are truly locked into BJ’s fees and purchasing. Product quality needs to be on par with grocery and mass merchandisers, and maintaining tight price controls on bulk products will be critical. Club customers are always comparing and they can nail down unit prices just as well as anyone. The fee structure is a weakness and a strength as it reduces store traffic but induces a temporary loyalty. For BJ’s, price optimization at the unit level is critical — because as soon as prices match the… Read more »

Growth as a % of sales? Sure — the “pay for membership” big box “buy a lot of stuff because of the price” format probably has some room for growth, more so than a “traditional” supermarket chain.

As for BJ’s, the format is not nearly as interesting a shopping experience as Costco, so I do not care how many robots they put in their store, they need to find a “something” that makes going in there more “exciting.” Costco has the treasure hunt atmosphere plus the “we will never charge more than $1.50 for hot dogs” thing …what does BJ’s have? A lot of stuff, just like Costco but with less “panache” from a merchandising standpoint.

Cost take out and efficiencies will ALWAYS be important, however, you need to find some “magic” that brings shoppers into the store. In my view BJ’s has not found that yet.

There are warehouse customers and there are grocery store customers. Some of us enjoy visits to warehouse clubs but do not have a need for the giant packs of what they sell. As a consumer, I see warehouse clubs as supplement shopping resources, but even when my children were kids, grocery store visits always came first.

Robots on the sales floor are a good idea, and not just for the novelty: “Will you look at that!” The fact that they provide real-time information frees up store associates to do other tasks, and spend more time with shoppers.

Great idea. However, the robots that are monitoring merchandise can not straighten merchandise on the shelves or restock shelves. Unless people are paying attention to what the robots “see” better than they have paid attention to data being collected, the results may not be significantly different.

In-stock and at the shelf is absolutely critical in BJ’s category, so I understand the investment in robotics. I am just not sure I think robots are the long-term answer. They can expensive, clumsy, and intrusive. I assume BJ’s has tested them and is satisfied with the ROI/experience impacts, so we will have to watch this space closely to see if they stick – and expand to other retailers.

Unlike grocery and mass, warehouse clubs are not geographically saturated – that alone should give them room for growth. But gee, robots? That’s a ton of money per store to spend to identify out-of-stocks and correct pricing mistakes on shelf.

While the appeal of warehouse clubs in inflationary times is obvious, times change. The economy is more or less cyclical so building an infrastructure for today doesn’t necessarily guarantee success tomorrow. In fact, the opposite is often true. The question also assumes all three channels have equal opportunities and that’s clearly not true, especially in the case of mass merchants. Finally, warehouse clubs aren’t like grocery stores. It’s harder to find “A” sites and much easier to saturate an individual market. Right now BJ’s is on a roll. The challenge will be to correctly perceive when it’s time to slow down the expansion.

Club Stores serve shoppers who can afford to inventory large supplies of product and pay the annual fee. So when the economy improves, it doesn’t mean the price sensitive club shopper goes away. The format will continue be relevant for big trips.

Warehouse club retail format have peformed very well even before inflation gave conusmers another reason to focus on value even more. Off-price and warehouse format stores seem to do well in all economic conditions and are currently the hot retail segments. Regarding the robots, it seems like the value proposition is best for the robots that combine multiple tasks, like floor cleaning and shelf inventory montoring.

This is a risky idea. Humans and robots don’t mix well. I went to a restaurant recently where the food was served by a robot. It was uncomfortable and made dining feel stilted and inhuman.

That said, some gadget geeks will love this. But not the mass market.

This BJ’s news is a great example of the necessity for retailers wanting to build an enduring brand to constantly be smartly investing in technology and digital customer experience enhancements that not only best fit their strategy, but have a meaningful impact on customer/member spend, loyalty and advocacy.

Yes, the warehouse club will continue growing. The robot presence is fizzling in grocery, but still has a viable use case in warehouse formats for the time being.