July was a bit of an off month at BJ's Wholesale Club
Comps rose just 1.5% in July. Part of the reason was gasoline sales, which subtracted 0.6% from the July total after having helped to boost the numbers in past months. BJ's generally prices gas below the average in a particular market, to help drive traffic into the stores, yet even traffic -- excluding gasoline -- decreased 1%. This dip, however, was caused in part by a change in its spring membership trial, which cut off this year on July 9. Last year, the trial ran until the end of July.
On the positive front, the average transaction at BJ's grew 4%, meaning customers spent more once they got inside the stores. Doesn't surprise me too much -- my wife can never leave the store spending less than $100, since, after all you could always use that jumbo bottle of detergent.
Continuing to be BJ's strong suit, food sales increased 5% on a comparable basis. Maintaining growth here is important, since food accounts for about 60% of BJ's general sales, and it shouldn't be too hard since, given rising prices, consumers are likely to continue buying food in bulk quantities to save some money.
But the company still has to get its customers to buy other higher-margin items. General-merchandise comps declined 1% on lower sales of air conditioners, furniture, and toys. Even though books were a strong category, it was driven by one item -- the new Harry Potter title.
BJ's has some significant advantages over rivals Costco
Related Foolishness:
- BJ's Keeping Up With the Big Boys
- BJ's Wholesale Club Needs a Cleanup: Fool by Numbers
- BJ's in a Funk: Fool by Numbers
Costco is a Motley Fool Stock Advisor selection and Wal-Mart is a Motley Fool Inside Value recommendation. Try out any of our investing services free for 30 days.
Fool contributor Larry Rothman is happy to receive feedback, and he promises to read it when he's not being wrestled by his three children. Feel free to email him at [email protected]. He doesn't have any positions in the companies mentioned.