Costco is a favorite of many investors, with the stock surging during 2021 as it benefitted from Covid lockdowns. As a result, the company's stock climbed from around $310 in March that year to about $570 by December.
However, an up-and-coming competitor that also benefitted from the pandemic is gaining ground… BJ's Wholesale is a membership-only warehouse club chain based in Westborough, Massachusetts, operating 215 Clubs in 16 states. And it’s expanding too. In March, it announced the first wave of new club openings this year in Rhode Island, Florida, Michigan, and New York. In its Q4 earnings report, BJ's stated that 2021 was "the best year in the company's history." They added that its financial results, which beat earnings expectations, were underpinned by continued membership base expansion.
LikeFolio's Overall Mentions data shows the buzz surrounding BJ's Wholesale is gaining traction, trending at
+43% YoY. That rise in mentions suggests it could be gaining a little market share from its competitors…
Just look at BJ’s total YoY buzz compared to its competitors:
As you can see, BJ's is significantly outpacing Costco and Sam's Club from a Total Mentions standpoint.
Consumer Happiness, while not the best in the LikeFolio universe ( 60% positive), is making good strides forward:
Happiness has improved +5% QoQ and YoY.
BJ's is expected to report earnings on May 19th before the open.
With inflation, supply chain challenges, and
talks of food shortages, companies such as BJ's, Costco, and Sam's Club should benefit. The question is, will we see that in BJ's Q1 earnings? People are more likely to stock up on goods, and wholesalers are the best place to go. Some wholesale clubs are looking to capitalize on rising gas prices by offering extra discounts at the pump. On the flip side, rising fuel and food prices may result in consumers choosing to consolidate trips — fitting right into BJ's business model of bulk savings.
Consumer mentions expressing concern about food prices or the inability to afford groceries have, as expected, surged recently, pacing
+62% QoQ and +178% YoY. Meanwhile, frugality mentions are also climbing at +8% QoQ and +15% YoY, albeit not as rapidly. Despite the various tailwinds, there is a caveat. While Consumer Buzz has spiked, Purchase Intent mentions are yet to see a similar rise, trending just 0% QoQ and +8% YoY. However, as we mentioned with the RVLV piece last week, rising happiness alongside rising mentions is a rare occurrence on the LikeFolio platform, and we have taken note. With the stock down 9% in 2022, we could be looking at an attractive entry point…