Think warehouse clubs and some hefty images come to mind. Maybe you picture the soccer mom trying to jam that two-ton box of Froot Loops into her trunk. Or the poor restaurateur tempting a hernia, lugging that crate of table salt to the register. Tall tales? Naturally. But membership club success always seemed to count on the mystique of big savings in bulk packaging.
So the big news from BJ's Wholesale Club (NYSE:BJ) is that its new Life-Size merchandise has it playing small ball. Promising convenient smaller-sized options in produce, dairy, meat and baked goods products, BJ's is no longer just for loading up the bomb shelter to last through the end of the year.
The list of participating outlets numbers just shy of 100. While that's more than half the company's unit base, it's easy to see why BJ's is taking it slow with this Life-Size decision. If the public begins to perceive BJ's as run-of-the-mill, the annual membership fees will seem out of whack with supermarket reality.
Rival Sam's Club knows about foodstuffs in family-friendly sizes. It's being stocked in the growing fleet of parent company Wal-Mart's (NYSE:WMT) Supercenters. Market leader Costco (NASDAQ:COST) seems to be just fine livin' large.
BJ's had better make sure it doesn't blur its market position. Smart & Final (NYSE:SMF) is scaling back working in that tight niche, selling off some of its stores and its foodservice operations to companies like Sysco (NYSE:SYY).
Getting small, BJ's? Big mistake.
