Warehouse clubs once ruled the retail space. Business was strong, as folks strolled through the stacked aisles to find cheap prices on large packages.
But sometimes there's just too much of a good thing. The major players grew beyond their regional strongholds, and competition became as fierce as choice real estate became scarce.
And it's not just Costco. BJ's Wholesale Club
With the sector's fundamentals as barren as the industry's penchant for bare-bones décor, the lure of big-box warehouse clubs is wearing thin. The chains should be thriving in this economic lull, as folks try to stretch their buying dollars. Instead, they're all coping with the reality that the market has become saturated with the warehouse concept.
But with Costco and BJ's trading at four-year lows, is it time to approach the stocks the way shoppers do its stores -- bargain hunting? Give it some thought. The valuations may appear attractive, but the sector's heady growth days may be a thing of the past.
In short, buyer beware.