BJ’s Hopes to Drive Growth via Assortment Changes

BJ’s Wholesale Club aims to ramp up growth this year by making certain assortment changes. The move comes after eliminating 70 headquarters positions in the fourth quarter as part of a cost reduction program, Operation Momentum.

During a call discussing the company’s reported Q4 results, CEO Lee Delaney, who succeeded Chris Baldwin as CEO last fall, outlined a growth plan focused on omnichannel, membership, merchandising, systems and analytics.

“We have a tremendous opportunity to enter new product and service categories, where we can offer great member value and deliver growth,” noted Delaney. “For example, we're under-assorted in key growth segments like healthy and organic products, plant-based foods, active nutrition and multicultural items. We also offer considerably less assortment in general merchandise categories, including connected home electronics, DIY products, camping supplies and sporting goods. We also lack a full range of services. We will be adding things like cellular phones, home improvement, and financial and business services.”

To make room for the new categories, BJ’s plans to thin its offering in traditional center store grocery categories where it’s over-assorted.

“We offer way more choice in center store grocery categories than our members need,” explained Delaney. “For example, we carry 4.5 times the pasta and sauce compared to our wholesale club competitors. We have four times the amount of the deodorant. This extra choice does not fuel growth and leaves us overdeveloped in declining and nonproductive categories.”

The retailer also intends to accelerate growth of its own-brands portfolio, which is currently about 20% of sales, and fill its real estate pipeline with new projects.

Westborough, Mass.-based BJ’s operates 217 clubs and 140 BJ's Gas locations in 16 states.

To learn more, read the article on the website of Progressive Grocer’s sister publication Retail Leader.