Wholesale Club Expansion: Why Costco, Sam's Club, and BJ's are Opening New Stores, Gaining Members, and Dominating the Retail Sector

Key Takeaways

• Inflation's Impact: Rising prices have forced shoppers to seek value, making warehouse clubs a go-to for savings on essentials and gas. Membership growth has skyrocketed across all three major players.

• Digital & Experience Shifts: Clubs are no longer just about bulk bins. They've added sushi chefs, digital scan-and-go tech, and curbside pickup, appealing to younger demographics who value convenience.

• Aggressive Expansion: Costco, Sam's Club, and BJ's are all expanding into each other's territories, with Sam's planning 15+ new clubs yearly and BJ's targeting 25-30 locations in the next two years.

Warehouse clubs are having a moment

Yeah, I've been a Costco member for over a decade now, and something really shifted these past few years. Remember when wholesale clubs were just for small businesses or giant families buying enough toilet paper to last a nuclear winter? Now, honestly, it feels like everyone and their cousin has a membership card. The parking lots are fuller than ever, and good luck finding a spot on a weekend, it's like Black Friday every damn day.

The pandemic definitely changed things. When people started panic-buying in 2020, clubs became essential for stocking up. But that was just the beginning. Even after that initial craziness died down, folks realized these places could save them serious money on groceries and gas, especially with inflation kicking everyones butt. According to one analyst, high inflation "brought the club channel more and more into focus" . It's not just about buying in bulk anymore. It's about maximizing your households budget without sacrificing quality.

And the expansion plans are insane. All three major players are in a race to open new locations. Costco's sticking with it's aggressive plan of about 30 new clubs per year . Sam's Club, after closing a bunch of stores back in 2018, is now saying they'll open 15 new clubs annually for the forseeable future . BJ's, the smaller player on the block, wants to open 25 to 30 new clubs in the next two fiscal years . That's a whole lot of new places to get a $1.50 hot dog.

Inflation changed the game for wholesale

Inflation freaking hurt. When prices at regular grocery stores started climbing, people had to find ways to stretch their dollars further. That's when warehouse clubs really started shining. For alot of us, filling up the gas tank alone makes the membership worth it. Clubs have always been known for cheaper gas and bulk household staples, but now they've become a lifeline for average families trying to cope with the rising cost of, well, everything.

The numbers don't lie. Shares for these companies have shot up over the past five years. Since March 2020, Costco's stock is up about 215% and BJ's is up about 305% . That's wild growth. And it's not just investors benefiting, membership rolls are swelling. Costco had nearly 80 million paid household members globally as of mid-May . BJ's, the smallest of the three, has grown to about 8 million members, which is a 55% increase since it went public seven years ago . Sam's Club doesn't disclose their numbers, but their membership income grew nearly 8% in the U.S. in the most recent quarter .

It's not just about economics though. The clubs have upped there game in terms of merchandise and experience. Their private label offerings have gotten stronger, think Kirkland Signature at Costco or Member's Mark at Sam's, and the shopping experience has improved with cleaner stores and better technology . They've also mastered the art of the "treasure hunt," stocking unexpected items that go viral on social media, like Costco's gold bars that racked up over $100 million in sales in a single quarter . Who'd of thought you could buy gold next to your frozen pizza?

Not your parents wholesale club

The stereotype of warehouse clubs being for older folks or large families is totally outdated. Gen Z and millennial shoppers are helping fuel the clubs gains now . I've noticed this myself, the aisles are definitely filled with more young people than they used to be. Costco's CFO mentioned that their average age of members has fallen, and now just under half of new members each year are under age 40 . That's a huge shift.

So what's bringing in the younger crowd? For one, clubs have gotten way better with digital options. Sam's Club's Scan & Go feature lets you ring up your own items while you shop using their app, about 40% of their transactions are through this system . That's a game changer for avoiding those insane checkout lines. BJ's has seen digital sales jump 34% in the most recent quarter compared to a year ago . Their CEO called it a "generational unlock" that's attracted busy families and younger shoppers .

Then there's the food. Clubs have expanded beyond cheap hot dogs and pizza to include actually good ready-to-eat meals. Sam's Club now has sushi stations where chefs make fresh rolls daily in front of customers, starting at around $8 per roll . They've even made sushi available for curbside pickup and delivery. It's genius, instead of ordering from an expensive restaurant, you can grab affordable sushi while doing your regular shopping. For younger consumers who value experiences and convenience but are budget-conscious, this stuff is golden.

The regional battle is heating up

Historically, the three major clubs had there own regional strongholds. Costco dominated the West Coast, Sam's Club was strongest in the Midwest and South, and BJ's was mainly an East Coast thing . This geographic segmentation meant they didn't compete directly as much. But that's all changing now as each chain expands beyond it's traditional territory.

The data on visit share shows this clear regional divide. As of July 2025, Costco controlled 67.3% of the combined visit share in Arizona, while Sam's Club dominated Texas with 63.0% of visit share . But now they're invading each other's turf. Sam's Club is opening a store in Arizona, and Costco recently opened a location in Texas . BJ's, which has historically been on the East Coast, is breaking into new markets like Texas by opening four locations in the Dallas-Fort Worth area .

This expansion into new territories is creating way more competition. Success will depend on each chain's ability to adapt their regional strategies to new demographics and secure optimal locations before their competitors do . It's like a retail game of Risk out there. For consumers, this means more options and potentially better prices as clubs compete for business. For the clubs themselves, it means they can't rely on their traditional regional advantages anymore, they need to prove their value proposition works everywhere.

Why membership fees don't tell the whole story

People get obsessed with comparing membership fees, but that's only part of the value equation. Yeah, BJ's has the lowest entry-level fee at $60 for their basic membership, compared to Costco's $65 and Sam's Club's $50 . But the real question is what you get for that fee, and how much you save throughout the year.

All three clubs operate on similar business models where membership fees contribute significantly to profits. At Sam's Club, between 80% and 90% of profits come from membership fees . That's why they're so focused on growing their member base. But the clubs know that to justify those fees, they need to provide ongoing value that keeps people renewing. BJ's has reached a 90% renewal rate , which is pretty impressive when you think about it.

Where the clubs really differentiate is in the additional benefits. BJ's offers welcome rewards of $40-$80 for new members at some locations . They also have a rewards program with non-expiring benefits, which is huge for people who hate expiration dates. Sam's Club has been leveraging it's parent company Walmart's resources to enhance their offering. And Costco, well, everyone knows about Costco's legendary loyalty. Despite some controversies, like sticking by their diversity policies despite some backlash, their fan following remains incredibly strong . The fact that the U.S. Transportation Security Administration had to specifically announce that Costco membership cards don't count as Real ID shows how ubiquitous they've become .

The private label arms race

If you think club brands are just cheap knock-offs, you haven't been paying attention. Private label products have become a massive point of differentiation between the clubs. Each has developed their own premium house brands that often rival or exceed the quality of national brands, but at significant savings.

Costco's Kirkland Signature is basically a status symbol at this point. Their private label penetration rate is 33%, and Kirkland products are growing "a little faster" than the rest of their business . Most of these sales are in food and sundries, which makes sense since that's what people buy most frequently. At BJ's, private label sales make up more than 25% of their total business, and they're confident they'll soon hit their 30% penetration rate goal . Their Wellsley Farms and Berkley Jensen brands have gained a loyal following. In 2024, they launched a new line of food storage bags under the Berkley Jensen brand that were priced as much as $10 less than similar products from a well-known national brand .

Sam's Club has taken an innovative approach with their Member's Mark brand. They've created a Member's Mark Community, an opt-in network where participants can vote on exclusive flavors and test new items . As one executive put it: "We don't send Member's Mark-branded products to our clubs without member approval" . This collaborative approach ensures new items align with what members actually want. Across all three clubs, private brand growth is outpacing overall private-brand growth by almost two times . The clubs collectively have about 20% of the market in private brands and saw growth of about 50% in 2024 . That's alot of store-brand products flying off the shelves.

Where this is all headed

So what's next for warehouse clubs? Based on the current trends, we can expect a few key developments. First, the expansion isn't slowing down anytime soon. Sam's Club wants to double its membership over the next eight to ten years . That's an ambitious goal that will require maintaining their current momentum while continuing to innovate. All three clubs will likely continue expanding into new territories, which means more competition in markets that previously were dominated by just one player.

Digital integration will keep being a major focus. BJ's has seen how digital sales growth, 34% in Q2 2025, drives overall success . Same-day delivery orders tend to be about 25% to 30% bigger baskets than in-club shops . That's a huge incentive for clubs to improve their digital offerings. We'll probably see more features like Sam's Club's Scan & Go and enhanced curbside pickup options across all clubs. The technology at the new Grapevine, Texas Sam's Club location, which has no checkout lanes and displays of online-only items, likely represents the future of club design .

Demographically, clubs will continue targeting younger members who have different shopping habits than traditional members. This means more fresh prepared foods, more digital integration, and perhaps even smaller-format stores for urban areas. As Costco's CFO noted, their average member age has been falling . Clubs that successfully capture and retain these younger members will have a significant advantage in the coming decades. Also, with tariffs and economic uncertainty continuing to be factors, clubs focus on value will remain relevant. Their ability to navigate these challenges while maintaining low prices will be critical to there ongoing success.

Frequently Asked Questions

Which warehouse club has the best membership value?

This really depends on your shopping habits. BJ's has the lowest entry price at $60 annually, while Sam's Club is $50 and Costco is $65 . But Costco's loyalty might justify the higher fee for some. BJ's offers nice welcome rewards sometimes up to $80 for new members . Consider what you'll actually buy regularly, gas, groceries, etc., and whose private label brands you prefer.

Are warehouse clubs really cheaper than regular grocery stores?

For bulk items and staples, absolutely. BJ's claims they undercut typical grocery store prices by roughly 25% . Where you might not save as much is on perishables if you can't consume them before they go bad. Also, clubs have gotten better about offering smaller packages in recent years, which helps with this issue.

What digital features do the clubs offer?

Sam's Club has Scan & Go, which lets you check out via their app without waiting in line . BJ's has ExpressPay and mobile ordering, which contributed to their 34% digital sales growth . Costco's app has gotten better but still lags somewhat in e-commerce, with only about 8% of business coming from online sales excluding third-party deliveries .

Which club is expanding the most aggressively?

All three are expanding, but in different ways. Costco plans about 30 new clubs globally per year . Sam's Club wants to open 15 new U.S. locations annually . BJ's is planning 25-30 new clubs over the next two fiscal years . So BJ's has the most aggressive relative expansion given their smaller size.

Can I use club membership without a family?

Absolutely! Clubs have increasingly catered to smaller households and even singles. Many now offer smaller package sizes, and the prepared foods are perfect for individuals. The demographic shift toward younger members includes many singles and couples without children . The value proposition isn't just for families anymore.