BJ's Wholesale Signs Partnership With DoorDash: Will Costco And Sam's Club Make Similar Moves?

A leading wholesale retailer is offering delivery with DoorDash in a move that could have a ripple effect on big-box membership retailers. Here’s the latest.

What Happened: Retailer BJ’s Wholesale Club Holdings Inc BJ announced a partnership with DoorDash Inc DASH Monday.

The partnership will bring additional delivery options available to all BJ’s Wholesale Club members from its 226 retail locations in 17 states.

This marks the first wholesale club with all items available for DoorDash delivery. BJ’s members and non-members can order products from the DoorDash app and have them delivered.

BJ’s members will get lower, member-only pricing when linking their wholesale club card to the DoorDash orders.

“BJ’s is proud to bring the convenience and value our members know and love to even more shoppers through the DoorDash marketplace,” BJ’s Wholesale Club Chief Digital Officer Monica Schwartz said.

BJ’s items will also be featured on DashPass, the membership program from DoorDash that offers zero dollar delivery fees for one monthly fee.

Related Link: Costco Q2 Earnings Highlights: Revenue, EPS Beat, Store Sales up 12.6% And Early February Numbers 

Why It’s Important: This marks a big milestone for membership big-box retailers. BJ’s will now be available on DoorDash, which is one of the largest delivery platforms.

Walmart Inc WMT unit Sam’s Club offers delivery through DoorDash on prescriptions and delivery options through a partnership with Instacart.

Costco Wholesale Corporation COST launched a pilot program with Uber Technologies Inc UBER in 2021 for delivery but has not rolled the program out nationally or for all category items.

Along with being the first of the major membership wholesale discount retailers to land a major partnership with DoorDash, the deal includes making products available to non-members, a move that could be closely watched by the industry.

“We are excited to expand easy shopping solutions for our members, while also bringing BJ’s wide assortment and exclusive products to new potential members,” Schwartz said.

Making its products available to non-members could be a huge move to bring in incremental revenue for BJ’s given the wide customer base of DoorDash and availability on DashPass. The move could provide a base case of how much Costco and Sam’s Club are missing out on by being members only.

Costco recently hinted at raising its monthly membership price. The company charges $60 annually for its Gold Star membership and $120 annually for its exclusive membership tier.

Sam’s Club charges $45 and $100 annually for its Club and Plus membership tiers, respectively.

BJ’s charges $55 and $110 annually for its Inner Circle and Perks Rewards membership plans, respectively.

BJ’s gets a larger portion of its revenue from membership fees as it has fewer stores and a lower revenue amount. BJ’s has 6 million members and 226 locations; Costco ended the second quarter with 63.4 million member households and 829 locations, including 573 in the U.S.

BJ’s reported sales growth of 10.4% in the fourth quarter to $4.36 billion. Full fiscal year revenue was $16.67 billion, up 8.0% year-over-year.

Costco’s recently reported second-quarter saw net sales increase 16.1% year-over-year, outpacing its peers.

Price Action, via Benzinga Pro: BJ’s shares are down 2% year-to-date in 2022 and up 42% over the last year. Shares are at $65.05, up 1.43% on Monday morning.

Costco shares are down 2% year-to-date and up over 56% over the last year. Shares are at $557.36, up 0.30% Monday morning.

Walmart shares are down 1% year-to-date and up 5% over the last year.  Shares are at $144.45, up 0.68%, Monday morning.

Photo: Courtesy BJ's