Why BJs & Costco Have A Massive Advantage Over Their Competition
Learn why wholesale giants BJs' and Costco's bulk offerings and discount prices are giving them both a major leg up on their competition.
As current economic conditions cause the price of everyday items to soar, you can continue to look to BJs and Costco for incredible savings. This means if you are already a value shopper at one or both of these major wholesale chains, you can expect to see your savvy savings start to really pay off. This all is coming to light as Loop Capital Markets raised revenue estimates for both Costco and BJs wholesale club holdings, signaling that both companies have a major advantage over competing retailers.
Seeking Alpha reported that Costco and BJs are predicted to have exponential increases in capital because inflation is working in the Wholesale store’s favor. “We believe traffic is growing for both companies as their competitive gas and food prices drive consumers to the clubs,” stated analyst Laura Champine. This too has been reflected in both companies’ stock market performance. Last week Costco rose 0.56% in premarket action to $597.64 and BJs Wholesale Club gained 0.63% to $70.00.
Champine, who is the Director of Research and Senior Consumer Analyst at Loop Capital Markets, has been following a wide range of consumer stocks for 20 years. Champine’s experience in launching and leading institutionally-relevant consumer sector coverage is what informed her promising predictions for both wholesale giants.
However, it may not be all smooth sailing for BJs and Costco. One downfall, particularly in terms of how it will affect the end consumer, of the expected revenue rises could be a cost increase in the membership fees for both Costco and BJs. Costco has typically increased its membership fees every five years and this June will be the five-year mark since the last fee increase. Champine states “We think the likelihood of a fee hike announcement is increasing each quarter. We also expect BJ’s to follow Costco’s fee hike based on historical patterns.”
At present, the annual membership fee for Costco is currently $60 to be a Gold Star Member or $120 to be an Executive member. However, as a sign-on bonus, Costco is offering a $20 shop gift card to all Executive members that join in the next thirty days. The shop gift card will be mailed out to Executive Members within 4-6 weeks after becoming a member and cannot be redeemed for cash.
You do not have to be a member to shop online at Costco, however, you have to be a member in order to purchase items within the store and check out. Unless you are shopping with someone else who is a member.
In comparison to Costco, the annual membership fee for BJs is currently only $55 for the inner circle membership or $110 to be a Perks Rewards member. It also only currently costs $30 each to add up to 3 additional Members to your existing membership at BJs.
So in comparing both wholesale chains, the membership costs are pretty close to the same. No additional specifics have been provided on the possible rate increases. If you aren’t already a member and want to get a jump on savings, it is recommended to join prior to June 2022.
