BJs Wholesale Is Creeping In On Costco's Territory: Here's How

Costco Wholesale Corporation COST remains the wholesale leader, but smaller rival BJs Wholesale Club Holdings Inc BJ is showing superior metrics.

What To Know: Costco entered 2020 on a strong note but the early days of the COVID-19 pandemic quickly shifted buying habits, according to the foot traffic analytic firm Placer.ai report.

Since early 2020, Costco has seen inconsistent foot traffic trends to the point where it saw year-over-year growth in just four months -- all of which were in the back half of the year.

BJs, on the other hand, saw a stellar 2020 with year-over-year foot traffic growth in every month except January. The smaller wholesale chain averaged 13.8% monthly year-over-year growth in visits in the back half of 2020. The momentum continues into 2021 with an identical 13.8% growth rate in January.

Related Link: Can Grocers Sustain The 'Pre-Christmas Bump'?

Why It's Important: Foot traffic trends are only one part of the equation as it's possible that customers are visiting Costco less often but spending more per trip. In Costco's case, visits were down 1.7% from November 2020 to January 2021 while visits per visitor were down 28.9%.

"A massive decline in visits per visitor alongside a fairly minor drop in overall visits shows that Costco may actually be stronger than it's ever been and that the brand is likely adding new members at a very high rate," according to the Placer.ai report.

What's Next: BJs deserves credit for a strong 2020 performance but it's unclear if it can sustain momentum in 2021 and beyond, according to Placer.ai. The company continues to offer the compelling value that stands out amid economic uncertainty.

BJs Wholesale's stock is up nearly 60% over the past year, while Costco's is up about 4.5%.