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BJ's Wholesale Club (BJ) Digitization Efforts Fuel Sales

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Technological advancements have dramatically altered the way we shop. From online ordering to flexible and swift delivery systems, consumers can choose from myriad options that best suit their lifestyle and convenience. With online grocery shopping here to stay even after the pandemic subsides, BJ's Wholesale Club Holdings, Inc. (BJ - Free Report) has been ramping up digital solutions and strengthening delivery capabilities to make shopping more seamless.

Digitization a Key Catalyst

BJ's Wholesale Club has been directing resources toward expanding digital capabilities in order to better engage with members and provide them a convenient way to shop, including same-day delivery, contactless curbside pick-up, and buy-online, pickup-in-club (BOPIC). Markedly, the company has launched curbside pickup and expanded BOPIC service for fresh and frozen grocery items at all its locations. BJ's Wholesale Club has teamed up with DoorDash to provide on-demand grocery delivery from its stores.

The company has built a strong digital portfolio with Bjs.com, BerkleyJensen.com, Wellsleyfarms.com, delivery.bjs.com and the BJ’s mobile app. This enables members to buy, review products and digitally add coupons to their membership card. The company has rolled out the ability to utilize state Electronic Benefit Transfer cards when shopping on BJs.com. It has also introduced ExpressPay, whereby members, if shopping in-club, can scan items they wish to purchase and make payment through the BJ’s mobile app and go.

 

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In a latest development, the company announced the launch of Same-Day Select membership add-on option. This is an advanced option of expedited grocery delivery for its members in as little as two hours. Members can pay a one-time fee upfront for either unlimited or a set number of same-day grocery deliveries. Members availing Same-Day Select program receive in-club pricing as well as the ability to earn rewards and use BJ’s coupons.

Management believes that digitally engaged members have higher average baskets and make more trips per year than members who shop in-club only. We note that digitally-enabled sales rose 19% during the fourth quarter of fiscal 2021, as members continue to take benefit of services such as BOPIC and curbside pickup. On a two-year stacked basis, digitally-enabled sales soared 187%. Approximately 80% of digitally enabled sales are fulfilled by clubs.

Bottom Line

BJ's Wholesale Club is leaving no stone unturned to improve top-line performance and expand its customer base, be it through better pricing, private label offerings, merchandise initiatives or digital solutions. These endeavors have been contributing to growth in membership signups and renewals.

Impressively, shares of this Zacks Rank #3 (Hold) company have climbed 14.3% in the past six months against the industry’s decline of 15.1%.

3 Stocks to Consider

Here we highlight three better-ranked stocks, namely, Target (TGT - Free Report) , Kroger (KR - Free Report) and Tractor Supply Company (TSCO - Free Report) .

General merchandise retailer Target currently sports a Zacks Rank #1 (Strong Buy). TGT has an expected EPS growth rate of 16.5% for three-five years. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Target’s current financial-year sales and EPS suggests growth of 3.5% and 6.7%, respectively, from the corresponding year-ago period’s levels. TGT has a trailing four-quarter earnings surprise of 21.3%, on average.

Kroger, the renowned grocery retailer, carries a Zacks Rank of 1 at present. KR has an expected EPS growth rate of 9.9% for three-five years.

The Zacks Consensus Estimate for Kroger’s current financial-year sales and EPS suggests growth of 2.4% and 1.9%, respectively, from the year-ago reported number. KR has a trailing four-quarter earnings surprise of 22.1%, on average.

Tractor Supply Company, a rural lifestyle retailer in the United States, carries a Zacks Rank #2 at present. TSCO has an expected EPS growth rate of 9.8% for three-five years.

The Zacks Consensus Estimate for Tractor Supply Company’s current financial-year sales and EPS suggests growth of 8.1% and 8.9%, respectively, from the corresponding year-ago period’s actuals. TSCO has a trailing four-quarter earnings surprise of 22%, on average.

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