Business
Club nation: Why Costco, Sam’s Club and BJ’s are opening new stores and gaining members
Costco Wholesale, Sam’s Club and BJ’s Wholesale stores.
Getty Images
On Costco’s last earnings call, executives were grilled about a problem few companies have: how is the company managing crowded stores and jammed-up parking lots?
That dilemma is a sign of the times for membership-based warehouse clubs. More Americans have literally joined the club — fueling growth for Costco, Walmart-owned Sam’s Club and BJ’s.
All three retailers are opening more locations across the country. Shares of the companies have shot up in the past five years, with Costco’s stock up about 215% and BJ’s up about 305% since the day the Covid pandemic began in March 2020. And Gen Z and millennial shoppers have helped fuel the club channel’s gains, as trendier brands and more convenient digital offerings attract younger shoppers.
High inflation “brought the club channel more and more into focus,” said Bobby Griffin, a consumer analyst at equity research firm Raymond James. The clubs have long been known as a place to buy cheaper gas or bulk packs of household staples for less.
Yet the companies have continued to “up the ante,” he said. Merchandise has gotten sharper, private label offerings have become stronger and the shopping experience has gotten more enjoyable as the retailers have spruced up stores and added more technology, he said.
Clubs have benefitted from an element of surprise, too. Along with selling bulk packs of paper towels and Keurig coffee pods, clubs have caught the attention of shoppers with items that tap into a desire for dupes or go viral on social media — such as Costco’s gold bars, which racked up more than $100 million in sales in a single quarter.
Along with the breakaway hit of gold bars, the many card-carrying members of Costco prompted an unusual message from the U.S. Transportation Security Administration this year. As the government agency phased in stricter requirements for ID cards, it announced across its social media accounts in June that Costco’s membership cards don’t count as a Real ID.
And Costco’s loyal fan following helped it to post strong sales — and attract support — despite some backlash for sticking by its diversity, equity and inclusion policies.
As they pick up newer and younger members, the warehouse clubs see more room for growth.
Sam’s Club earlier this year announced plans to open 15 clubs per year going forward, along with renovating its approximately 600 current clubs. It’s expanding its footprint again after shutting 63 locations across the country in 2018.
BJ’s plans to open 25 to 30 new clubs over the next two fiscal years. The smallest club player, which has historically had more locations on the East Coast, has broken into new markets like Texas by opening four locations in the Dallas-Fort Worth area.
And Costco has stuck with an aggressive expansion plan of opening about 30 clubs per year, with just over half of those in the U.S. and the rest in other parts of the globe, CFO Gary Millerchip told CNBC. In early August, Costco opened four clubs in three different countries: Quebec, Canada; North Guadalajara, Mexico; The Villages in Florida and Richland, Washington.
Costco is opening some of its new locations this year in existing markets where its clubs are crowded, Millerchip said.
Club retailers still face pressure, though, including an uncertain job market and tariffs. The companies have laid out strategies to reduce their hit from the duties: Costco leaders, for example, said on an earnings call that they diverted imported merchandise with high tariffs to their warehouse clubs in other parts of the world instead of the U.S.
Clubs’ rotating brands and treasure hunt approach could reduce their vulnerability to tariffs. While the retailers sell imported merchandise like furniture and clothing, the bulk of sales come from groceries, and the retailers could swap out or drop an item hit by high tariffs, Griffin said.
BJ’s will carry more holiday items this year from the U.S. or countries with lower tariff exposure, said Bill Werner, BJ’s executive vice president of strategy and development.
As retailers digest the long-term effects of tariffs, Costco will give the latest read on its business, and the club channel, when it reports earnings on Thursday.
Sushi dinners and speedier shopping
The desire for both convenience and cheaper food options has been a boon to warehouse clubs in recent years. Instead of ordering from a restaurant, customers have turned to club chains to deliver dinner.
Earlier this year, Sam’s Club’s rotisserie chicken, which costs $4.98, and its hot pizzas, which cost $8.98 apiece, joined the list of items that members can get dropped at their doors. And starting last year, the retailer began setting up sushi stations where chefs make fresh rolls, which start at around $8 for a roll, in front of customers each day. It recently made sushi available for curbside pickup and delivery, too.
Those are examples of the way that warehouse clubs — notoriously low-tech and low-frills — have flipped the script in the digital age.
Sam’s Club has added sushi stations to its stores where chefs make the rolls fresh. The sushi can also be delivered by same-day delivery to customers’ homes.
Courtesy of Sam’s Club
In the past, shoppers made a tradeoff for lower prices at clubs, Sam’s Club CFO Todd Sears said. They faced long lines, waited to get receipts checked at the store exit and navigated a maze of aisles when trying to find an item.
“Experience wasn’t a huge element of the club channel,” Sears said in an interview. “In fact, it was kind of billed as the experience might be a little bit worse, but you’re going to make up for it with value.”
Now, curbside pickup, home delivery and new store tech has made the shopping experience faster and more pleasant, he said.
“Someone coming home for work can pop in and get out within three minutes and have a meal for home,” Sears said, noting the company is seeing more frequent club visits instead of just huge stock-ups.
Sam’s Club, in particular, has used tech to stand out from competitors. Customers can skip the checkout line by using Scan & Go, a feature in the retailer’s app that allows shoppers to ring up their own items while browsing the aisles. About 40% of its transactions are through Scan & Go, Sears said.
It’s leaned on other tech, too, including automated floor scrubbers that free up employees’ time to help customers and high-tech archways at the exits that verify most purchases automatically instead of requiring an employee to manually check a receipt.
BJ’s, too, has capitalized on speedier digital options that appeal to busy families and younger shoppers. E-commerce sales at the club jumped 34% in the most recent quarter compared to the year-ago period. CEO Bob Eddy described the digital gains as a “generational unlock” that’s attracted busy families and younger shoppers.
Digital offerings have become a popular and lucrative part of BJ’s business, Werner said. Same-day delivery orders tend to be about 25% to 30% bigger baskets than in-club shops, he said. It charges a $15 fee for the deliveries, or members can pay $100 per year for unlimited same-day deliveries.
Still, Werner said BJ’s biggest selling point “comes back to value” with its pledge to undercut typical grocery store prices by roughly 25%. Food and household essentials like laundry detergent drive about 85% of its sales, he said.
At Costco, the largest club player by size and stock price, have more than doubled over the last decade. Yet digital sales, while growing, account for only a small part of its overall sales.
About 8% of Costco’s business comes from e-commerce, excluding third-party deliveries from Instacart and travel bookings, CEO Ron Vachris said on the company’s May earnings call.
Over half of members have downloaded Costco’s app, but its digital business is still in the early stages, Millerchip said on the company’s earnings call. He said as Costco will keep adding customer-friendly features, such as making it easier to search for items or save a credit card to speed up checkout.
“We still see it [e-commerce] as an area where we’d expect to outpace our overall growth,” he said on its earnings call.
A customer pushes a shopping cart towards the entrance of a BJ’s Wholesale Club Holdings Inc. location in Miami, Florida.
Scott McIntyre | Bloomberg | Getty Images
Younger shoppers, trendier brands
The retailers’ membership counts reflect how the U.S. has become a club nation.
Costco had nearly 80 million paid household members globally as of the end of its most recent quarter, which ended in mid-May. BJ’s, the smallest of the three club names, has grown to about 8 million members as of the most recently reported quarter, a 55% increase since it went public seven years ago.
Sam’s Club does not disclose its membership total, but its membership income grew nearly 8% in the U.S. in the most recent quarter. And its gains inspired the retailer to pledge this spring that it would double its membership over the next eight to 10 years.
Yet that growth is coming from a different kind of member. Along with soccer moms and big families, it’s drawn more Gen Z and millennial consumers. Those members include new homeowners, households without kids, and city dwellers who don’t have mortgages or abundant pantry space.
Sam’s Club’s fastest growing customer category is Gen Z and millennials, which have accounted for half of its membership growth for more than two years, Sears said.
Customers look over clothing items displayed on April 18, 2025 at a Costco branch in Niantic, Connecticut.
Robert Nickelsberg | Getty Images
Costco’s Millerchip told CNBC that its average age of members has fallen, and just under half of its new members that sign up each year are now under age 40. He said the club’s popularity during the Covid pandemic, the ease of digital sign-ups and increased social media attention on Costco all contributed to that trend.
Customers between the ages of 25 and 34 are the fastest growing spending segment of the club channel when it comes to merchandise outside of the grocery department, according to market research firm Circana.
That age group’s spending on general merchandise at clubs rose by 3% for January to July 2025 compared to the same period in the year prior, according to Circana, which tracks checkout data across retailers.
All three warehouse clubs have broadened their merchandise and bulked up digital options, particularly since the Covid pandemic, said Marshal Cohen, a chief industry advisor for Circana.
Along with lower-priced private label versions of items like olive oil and paper towels, clubs carry children’s clothing and back-to-school supplies, sell giftable items like jewelry and offer lower-priced health and wellness items like hearing aids, contact lenses and vitamins. That’s given shoppers more reasons to return to their stores and websites between stock-ups.
“They’re curating not only the brands better, but creating a better sense of adventure for the shopper,” he said.
Plus, he said the “great migration” of younger Americans during the pandemic from smaller apartments in cities to bigger homes in the suburbs or rural areas created a new customer base.
The improved merchandise at clubs has caught the attention and ire of competitors as well. Lululemon filed a lawsuit against Costco in late June, alleging that the company violated patents by selling lower-priced dupes of its athleisurewear including hoodies, jackets and pants.
Costco’s CFO Millerchip declined to comment on the lawsuit.
Clubs have drawn both young and more established brands that want to get picked up by the retailers.
Wellness brand Frida, best known for popular baby supplies like the NoseFrida, is exploring how its products could be packaged and sold in a club, founder and CEO Chelsea Hirschhorn said. She said the club channel has become more appealing as it moves away from generic products and adds more modern brands.
For some members, including Patrick Bannon, club retailers’ eye-catching assortment can be a danger to the wallet. The 29-year-old graduate student joined Costco about two years ago. At least every other month, he drives to a nearby Costco for a shopping trip — even though the drive can take 45 minutes in traffic and on weekend and evening visits, it can be tricky to “move your cart more than an inch without running into somebody.”
For Bannon, it takes creativity to squeeze bulk purchases into the cabinets, freezer and fridge space of the one-bedroom apartment in the Boston area that he rents with his girlfriend.
In his apartment, he has currently stashed away five different types of protein bars, two pounds of frozen vegetables, two one-gallon jugs of vegetable oil and three or four pounds of frozen chicken.
He signed up for Costco to buy cheaper groceries and staples like trash bags, but he’s wound up purchasing giant bags of snacks, a new brand of cold brew coffee and even khaki pants.
“You get to be a kid in the candy store again,” he said. “Except it’s not all candy.”
Business
‘Benchmark for countries’: FATF hails India’s asset recovery efforts; notes ED’s role in returning defrauded funds – The Times of India
NEW DELHI: The Financial Action Task Force (FATF) acknowledged India’s efforts in recovering public assets lost to financial crimes, highlighting a money laundering case where land confiscated by the Enforcement Directorate (ED) was identified for the construction of a new airport that would serve the public.The acknowledgment comes in FATF’s latest 340-page report titled ‘Asset Recovery Guidance and Best Practices,’ cited by PTI, which documents how countries can strengthen their systems to trace, freeze, manage and return proceeds of crime. The Paris-based FATF sets global standards for combating money laundering and terrorist financing.“The report outlines practical measures for policy makers and practitioners to identify, trace, freeze, manage, confiscate and return assets derived from criminal activity…” it said. “The guidance serves as a benchmark for countries to enhance their national frameworks and align with emerging best practices,” the Enforcement Directorate (ED) said in a statement.The report references several ED investigations involving recovery and restoration of assets to victims. These include the alleged Rose Valley Ponzi scheme, a drug trafficking case where the US sought India’s assistance leading to seizure of Bitcoins worth Rs 130 crore, and coordination between the ED and Andhra Pradesh Police CID to restore Rs 6,000 crore to victims of an alleged investment fraud.Another case cited involves the alleged diversion of public funds in a Maharashtra-based cooperative bank. The ED restored benami assets worth Rs 280 crore to compensate affected account holders after auctioning the properties. According to officials, the report noted that the confiscated properties “have been identified as a site for construction of new airport, to build infrastructure in India for the benefit of society at large”.“The contribution of India and the ED to this global effort has been substantial and widely acknowledged,” the agency said, as quoted by PTI. It added that India’s legal framework under the Prevention of Money Laundering Act (PMLA), along with operational experience, shaped key aspects of the global guidance related to value-based confiscation, provisional attachment and inter-agency coordination.The ED said the inclusion of Indian case studies “underlines the credibility of India’s enforcement mechanisms and the value of its experience in shaping future global standards.”According to FATF, the guidance aims to bring “tangible” improvement in the confiscation and return of criminal assets by enforcement agencies worldwide.
Marks and Spencer’s profits have fallen by more than half, following the major cyber attack it suffered earlier this year.
The hack impacted app and website orders, meaning online home and fashion sales plunged more than 40 per cent when the company had to stop taking orders.
However, the total stated impact so far is significantly lower than the £300m estimate the company gave in May.
M&S said the cost of the attack is set to total around £136m, including about another £34m in the final six months of its financial year, but it was able to recover £100m in its first half through an insurance payout for the hack.
In the aftermath of the attack, M&S announced 12 new food stores would open, including eight by summer 2026. An additional 550 jobs are expected to be created through the expansion.
The retail giant reported its underlying pre-tax profits tumbled 55.4 per cent to £184.1m in the six months to 27 September.
On a reported basis, profits were almost wiped out, plunging to £3.4m from £391.9m a year ago.
The group said sales in its fashion arm dropped by 16.4% as the cyber attack wrought havoc, with sales online down 42.9% and 3.4% lower across its stores.
The high street stalwart stopped all online sales for around six weeks and suffered empty shelves due to disruption to its logistics systems after hackers targeted the business around the Easter weekend.
Customer personal data – which could have included names, email addresses, postal addresses and dates of birth – was also taken by hackers.
Stuart Machin, chief executive of Marks and Spencer, said: “The first half of this year was an extraordinary moment in time for M&S.
“However, the underlying strength of our business and robust financial foundations gave us the resilience to face into the challenge and deal with it. We are now getting back on track.”
He said the group also faced cost increases of more than £50 million from the national insurance hike in April over its first half, but that he expects profits to be “at least in line with last year” in the final six months of its financial year as it ramps up its cost-cutting target to £600 million.
“The retail sector is facing significant headwinds… but there is much within our control and accelerating our cost-reduction programme will help to mitigate this,” he added.
In May, Mr Machin said the attack, which was caused by “human error”, was expected to cost the company around £300 million, before insurance claims or cost reductions to offset the impact.
M&S reported a surge in activity after its clothing, home and beauty sales returned online but some competitors such as Next saw market share grow during the period of disruption, suggesting some online shoppers went elsewhere.
Additional reporting by PA
M&S profits halved after it was hit by a cyber-attack which left shoppers unable to buy online from the company for months.
The British high street chain’s boss said the April attack was “an extraordinary moment in time” as it revealed it made £184m adjusted profit before tax for the first half of the year, compared with £413m the year prior.
As well as disrupting its online business, the hack affected the company in-store too, leaving some shelves bare in the weeks after M&S was targeted.
M&S said it had received £100m of insurance money related to combating the cyber-attack, around the amount which the incident had cost it so far, though it expects further costs in the coming months.
The fashion and food company was forced to suspend online orders for almost two months, with click and collect suspended for almost four months.
Revealing its financial figures for the six months to September, M&S said “the underlying strength” of the chain meant it was “getting back on track” and expected full-year profits to be in-line with last year.
One analyst told BBC’s Today programme that it was reassuring that the main part of M&S’s business, homewares and fashion, only saw sales decline around 16%.
“Given that they were offline for most of the trading period and really only came back online for their click and collect in August, it’s pretty, pretty resilient,” said Judith MacKenzie, head of Downing Fund Managers.
She said it was “outstanding” that its food sales were up 7.8% over that time despite it being “a pretty horrendous period” for the company.
The fact that costs related to the attack were lower than expected was positive, said Lucy Rumbold, equity research analyst at Quilter.
M&S had earlier estimated that the attack would cost it around £300m.
On a call after the results, chief executive Stuart Machin said: “in May, we anticipated the material impact of the incident on group operating profit to be around £300m this financial year, and we are broadly in line with that”.
He said there were costs from managing the impact, including more IT staffing, and increased food wastage as the firm switched to manual processing during the cyber attack.
Ms Rumbold said there was a view from investors that the disruption caused by the hack “was a one-off”.
“Normal trading can therefore resume and the positive story M&S had going prior to the cyber-attack remains in place.”
M&S said in the second half of the year it forecast profits would recover to the levels seen in 2024, “as the residual effects of the incident continue to reduce in the coming months.”
Mr Machin said the firm was looking forward to a profitable Christmas period, and said sales were going well of its much-loved rose mulled wine, and men’s washable tuxedos.
While profits at M&S tumbled, other retailers have seen a boost in sales as people turned to them for shopping after the cyber attack.
Next continued to see sales overperform, with its latest results in October seeing a 10.5% increase in sales. However, that was not as good as earlier in the year when it had seen “exceptional performance” in the immediate aftermath of the M&S cyber attack.
Super-stylist Clare Byrne is new fashion director of i-D
‘Benchmark for countries’: FATF hails India’s asset recovery efforts; notes ED’s role in returning defrauded funds – The Times of India
M&S reveals huge cost of cyber-attack which halted online sales
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