VOL. XCIV, NO. 247
★ WIDE MOAT STOCKS & COMPETITIVE ADVANTAGES ★
PRICE: 0 CENTS
Wednesday, January 7, 2026
BJ's Wholesale Club Holdings, Inc.
BJ · New York Stock Exchange
Weighted average of segment moat scores, combining moat strength, durability, confidence, market structure, pricing power, and market share.
Request update
Spot something outdated? Send a quick note and source so we can refresh this profile.
Overview
BJ's Wholesale Club operates membership warehouse clubs concentrated primarily in the eastern U.S., generating most revenue from merchandise and gasoline sales and a smaller, recurring stream from membership fees. The key moat elements are the warehouse-club cost model (direct purchasing and efficient distribution) plus prepaid membership fees supported by high renewal rates. BJ's also has a dense footprint in core New England markets and meaningful private label penetration that can support differentiation and margins. The main counterweights are intense price competition from larger warehouse clubs (Costco and Sam's Club) and relatively low switching costs for members.
Primary segment
Merchandise and Gasoline Sales
Market structure
Oligopoly
Market share
—
HHI: —
Coverage
2 segments · 6 tags
Updated 2026-01-06
Segments
Merchandise and Gasoline Sales
Membership warehouse club retail (groceries, fresh foods, general merchandise, gasoline, ancillary services)
Revenue
97.8%
Structure
Oligopoly
Pricing
weak
Share
—
Peers
Membership Fee Income
Paid warehouse club memberships (access subscriptions)
Revenue
2.2%
Structure
Oligopoly
Pricing
moderate
Share
—
Peers
Moat Claims
Merchandise and Gasoline Sales
Membership warehouse club retail (groceries, fresh foods, general merchandise, gasoline, ancillary services)
Revenue share derived from FY ended 2025-02-01: Net sales $20.045B / Total revenues $20.502B. Company reports one operating/reportable segment; this split isolates net sales vs membership fee income for moat analysis. Source: https://www.sec.gov/Archives/edgar/data/1531152/000153115225000013/bj-20250201.htm
Scale Economies Unit Cost
Supply
Scale Economies Unit Cost
Strength
Durability
Confidence
Evidence
Warehouse-club operating model (direct purchasing, high-volume turns, low-frills operations) supports structurally lower unit costs vs traditional retail formats.
Erosion risks
- Price wars led by larger rivals (Costco/Sam's)
- Labor, shrink, and freight inflation compressing cost advantage
- E-commerce substitution for general merchandise
Leading indicators
- Merchandise gross margin rate (ex-gas, ex-membership)
- SG&A as % of sales and SG&A leverage vs comps
- Comparable club sales (ex-gas) and traffic
Counterarguments
- Costco and Sam's Club have greater scale and can sustain lower pricing for longer
- Low-cost model is shared across warehouse clubs and is not exclusive to BJ's
Supply Chain Control
Supply
Supply Chain Control
Strength
Durability
Confidence
Evidence
Bringing perishable distribution and private fleet in-house improves control over service levels, freshness, and cost in high-frequency grocery/perishables.
Erosion risks
- Execution risk (service disruptions, costs, labor availability)
- Competitors investing similarly in logistics automation and cold-chain
- Supplier concentration / shocks in perishables
Leading indicators
- Perishables in-stock and spoilage/shrink metrics
- On-time delivery to clubs and transportation cost per case
- Perishables/grocery comp sales vs peers
Counterarguments
- Vertical integration can raise fixed costs and reduce flexibility
- Larger competitors may still have superior logistics scale
Physical Network Density
Supply
Physical Network Density
Strength
Durability
Confidence
Evidence
Dense club footprint in core markets (especially New England) supports convenience, local awareness, and distribution efficiency.
Erosion risks
- Competitor expansion into BJ's core regions
- Traffic diversion to e-commerce and delivery
- Real estate constraints and permitting delays
Leading indicators
- Core-market comparable club sales vs chain average
- New club ROI and payback periods
- Membership growth in legacy vs expansion markets
Counterarguments
- Competitors can still open nearby clubs over time (not a legal barrier)
- Density advantage is regional and may not translate nationally
Negative Working Capital
Financial
Negative Working Capital
Strength
Durability
Confidence
Evidence
Warehouse-club model often benefits from vendor terms and rapid turns that finance inventory via payables, improving cash conversion (industry mechanism that typically applies to BJ's model).
Erosion risks
- Vendors tighten payment terms or demand faster payment
- Slower inventory turns (weak demand) reduces cash conversion benefit
- Higher shrink increases working capital intensity
Leading indicators
- Cash conversion cycle and days payable outstanding
- Inventory turnover trend
- Operating cash flow vs net income
Counterarguments
- This advantage is common across warehouse clubs and not unique to BJ's
- Large competitors may negotiate better vendor terms
Brand Trust
Demand
Brand Trust
Strength
Durability
Confidence
Evidence
Private label brands (Wellsley Farms, Berkley Jensen) increase differentiation and margin, supporting member value perception and repeat purchasing.
Erosion risks
- Quality/recall events harming private label perception
- National brands use promotions to regain share
- Competitors expand or improve their own private labels
Leading indicators
- Private label penetration trend (ex-gas)
- Private label gross margin vs national brands
- Member satisfaction and return rates
Counterarguments
- Costco and other retailers also run strong private label programs
- Private label loyalty may be weaker for some categories where brands dominate
Membership Fee Income
Paid warehouse club memberships (access subscriptions)
Revenue share derived from FY ended 2025-02-01: Membership fee income $456.5M / Total revenues $20.502B. Source: https://www.sec.gov/Archives/edgar/data/1531152/000153115225000013/bj-20250201.htm
Float Prepayment
Financial
Float Prepayment
Strength
Durability
Confidence
Evidence
Prepaid annual membership fees provide recurring, relatively stable cash flow that supports reinvestment and low-price positioning; high renewal indicates stickiness.
Erosion risks
- Low switching costs to alternative clubs (Costco/Sam's) or grocery formats
- Economic stress increases cancellations/downgrades
- Perceived value deterioration (prices, service, convenience)
Leading indicators
- Tenured renewal rate and overall renewal rate trends
- Higher-tier membership penetration
- Membership fee income growth rate vs net sales growth
Counterarguments
- Membership is easy to cancel and competitors can offer promotions to poach members
- If price gaps narrow, renewal rates may fall
Habit Default
Demand
Habit Default
Strength
Durability
Confidence
Evidence
Once members build routines around bulk grocery/fuel trips and couponing, shopping behavior can become habitual; value framing reinforces the default choice to renew.
Erosion risks
- Competitors match pricing and convenience (delivery, omnichannel)
- Members shift trips to online grocery and hard discounters
- Gasoline demand declines structurally over time
Leading indicators
- Member shopping frequency and spend per trip
- Digital engagement (BOPIC, delivery adoption)
- Fuel gallons per member and fuel penetration
Counterarguments
- Habit is weaker when consumers multi-home memberships or shop across formats
- Low annual fee reduces true switching friction
Evidence
Warehouse clubs eliminate many costs by purchasing full truckloads directly from manufacturers and storing merchandise on the sales floor.
Primary mechanism for lower cost-to-serve and lower pricing versus traditional retailers.
We believe our efficient, low-cost form of distribution gives us a significant competitive advantage.
Management explicitly frames the distribution model as a competitive advantage.
We acquired four distribution centers and a private transportation fleet to bring the end-to-end perishable supply chain in-house.
Supports the claim of greater supply chain control in perishables.
In our core New England market, we operate more than three times the number of clubs versus the next largest warehouse club competitor.
Direct statement supporting density advantage in a key geographic stronghold.
We aim to locate our larger clubs in high density, high traffic locations that are difficult to replicate.
Suggests some location scarcity/replicability friction for competitors.
Showing 5 of 14 sources.
Risks & Indicators
Erosion risks
- Price wars led by larger rivals (Costco/Sam's)
- Labor, shrink, and freight inflation compressing cost advantage
- E-commerce substitution for general merchandise
- Execution risk (service disruptions, costs, labor availability)
- Competitors investing similarly in logistics automation and cold-chain
- Supplier concentration / shocks in perishables
Leading indicators
- Merchandise gross margin rate (ex-gas, ex-membership)
- SG&A as % of sales and SG&A leverage vs comps
- Comparable club sales (ex-gas) and traffic
- Perishables in-stock and spoilage/shrink metrics
- On-time delivery to clubs and transportation cost per case
- Perishables/grocery comp sales vs peers
Curation & Accuracy
This directory blends AI‑assisted discovery with human curation. Entries are reviewed, edited, and organized with the goal of expanding coverage and sharpening quality over time. Your feedback helps steer improvements (because no single human can capture everything all at once).
Details change. Pricing, features, and availability may be incomplete or out of date. Treat listings as a starting point and verify on the provider’s site before making decisions. If you spot an error or a gap, send a quick note and I’ll adjust.