BJ's Just Raised Membership Fees For the First Time In 7 Years
Between club openings, leadership changes, and the rollout of new shopper perks, BJ's Wholesale Club has undergone some very significant changes this year. Shoppers are about to see another major shift at the warehouse club, and this one will have a direct impact on their wallets.
When reporting its latest quarterly earnings results on Nov. 21, BJ's announced plans to raise its membership fees for the first time in seven years. Those with BJ's basic Club membership will see their annual rates increase from $55 to $60 on Jan. 1, 2025. Meanwhile, those with BJ's higher-tier Club+ membership will see their rates go from $110 to $120.
In an earnings call with investors this week, the company said the fee hike will allow it to provide even better experiences for its members. It plans to invest the proceeds from the increase into labor, better value, and a new membership perk for Club+ members. Starting Jan. 1, BJ's will offer two free same-day deliveries to Club + shoppers annually on eligible orders of $50 or more. BJ's same-day delivery service charges a flat fee of $14.99, so this new perk will offer even more savings and convenience to members.
"This new benefit alone is worth about three times the fee increase for our plus members," BJ's Chairman and CEO Bob Eddy said during the call.
Since its last fee increase in 2018, BJ's has invested heavily in labor, product selection, member benefits, and other parts of the business. Customers have responded positively to these investments, according to Eddy, and membership numbers have continued to climb. Last quarter, BJ's reached the 7.5 million member milestone and grew same-store sales by 1.5%.
Because the business is so strong, company executives believe now is the right time to raise membership rates.
"There's always a little risk from a renewal rate perspective when you raise the fee. But I would imagine this time around, given the performance of our business in general, that it will be significantly less risk than the last time that we raised the fees…I think we're very, very happy with the momentum that we have and I don't see that momentum slowing down," Eddy said.
BJ's announced its upcoming fee hike just a couple of months after a similar move from one of its biggest competitors. On Sept. 1, Costco raised its basic Gold Star membership rates from $60 to $65, while its higher-tier Executive membership went from $120 to $130. Costco had been hinting at plans to increase its fees for over a year before it announced the hike, but kept it off to give inflation time to ease.
"We were very deliberate about the timing" CFO Gary Millerchip explained during a September investors call.
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