As two of the most well-known and successful membership-based wholesale clubs, Costco and BJ‘s have a lot in common. Both promise steep savings on bulk goods to their loyal legions of card-carrying customers. But while they inhabit the same retail niche, these two giants have surprisingly different stories when you peek behind the curtain.
Perhaps the most common question from wholesale club shoppers is: "Are Costco and BJ‘s actually owned by the same company?" The short answer is an emphatic no. Costco and BJ‘s are completely separate entities, each with their own unique history, business model, and geographic footprint. But the long answer reveals a much richer tale of two wholesale titans battling for the bulk buying dollar.
As a consumer expert and professed retail geek, I‘ve spent countless hours walking the concrete floors of Costco and BJ‘s, hunting for deals and observing how they operate. Let‘s take a closer look at what really makes Costco and BJ‘s similar, what sets them apart, and which wholesale club reigns supreme for the savvy shopper.
A Not So Common History
Many shoppers assume Costco and BJ‘s are related because of their similar sounding names and store layouts. But the two companies sprouted from very different seeds.
The Costco Story
The history of Costco begins in 1976 in San Diego, when entrepreneur Sol Price opened the first Price Club warehouse to serve small businesses. But the "Costco" name didn‘t appear until 1983, when former Price Club executive Jim Sinegal went in with Seattle retailer Jeffery Brotman to open the first Costco warehouse.
The Price Club and Costco chains grew in parallel throughout the 1980s, until the companies merged in 1993 to form PriceCostco (though the Price Club name was phased out a few years later). Since then, Costco has ballooned into a global heavyweight with 842 locations across a dozen countries, including 583 warehouses in 48 U.S. states and Puerto Rico (as of their latest annual report).
Now the 5th largest retailer in the world, Costco has developed a reputation for steadfast commitment to value, quality, and efficiency. Its bare bones warehouses, limited selection, and bulk packaging create a unique "treasure hunt" shopping experience that breeds intensely loyal customers. By some estimates, roughly 90% of Costco‘s 116.6 million cardholders renew their membership each year (Motley Fool).
The BJ‘s Backstory
Though BJ‘s also traces its roots to the early 1980s, its trajectory has been quite different. In 1984, department store executive Mervyn Weich opened the first BJ‘s wholesale club in Medford, MA (allegedly naming it after his daughter Beverly Jean).
For the next two decades, BJ‘s bounced between a series of corporate owners and private equity firms, each trying to challenge Costco and Sam‘s Club with a regional spin on the wholesale concept. BJ‘s differentiated itself by offering a wider selection of name brands, accepting manufacturer‘s coupons, and adding ancillary services like Optical centers and gas stations.
Today, BJ‘s operates 229 warehouse clubs and 160 gas stations across 17 states, primarily concentrated in the eastern U.S. After returning to the public markets in 2018, BJ‘s is hitting its stride as a more nimble, accessible alternative to Costco. According to BJ‘s latest annual report, the company now serves 6.5 million paid members and notched record revenue of $16.3 billion in 2021.
Costco vs BJ‘s by the Numbers
On the surface, Costco and BJ‘s share the same general business model: get customers to pay an annual membership fee to access a curated assortment of deeply discounted products. But when you dissect the numbers, some key differences between their strategies emerge:
| Metric | Costco | BJ‘s |
|---|---|---|
| Annual Revenue | $226.9B | $16.3B |
| Membership Fee (Standard) | $60 | $55 |
| Number of Members | 116.6M | 6.5M |
| % of Members at "Executive" or "Elite" Level | 43% | 35% |
| Membership Renewal Rate | 92.5% | 89% |
| Avg. Annual Membership Spend | $1,500 | $1,417 |
| Avg. Store Size (sq. feet) | 146,000 | 113,000 |
| Avg. Number of SKUs per Store | 3,700 | 7,200 |
| Private Label Penetration | 30% | 20% |
| E-Commerce as % of Net Sales | 8% | 7% |
Sources: Latest annual reports and investor presentations from Costco and BJ‘s
The data shows that while Costco dwarfs BJ‘s in overall size and scale, the two companies have settled into slightly different niches. Costco‘s global footprint, spartan assortment, and massive buying power gives it unrivaled efficiency. But BJ‘s has found a profitable lane catering to the East Coast shopper who prefers a bit more variety and a few more frills with their bulk goods.
One interesting difference is in how Costco and BJ‘s approach their private label strategy. Costco‘s Kirkland Signature brand has become a major driver, now accounting for over $60 billion in sales by some estimates (CNN). BJ‘s has taken a more measured approach, slowly building its stable of store brands like Wellsley Farms and Berkley Jensen to complement the national labels.
E-commerce is another area of contrast between Costco and BJ‘s digital efforts. While both companies now offer delivery through third party services like Instacart, Costco has taken a more conservative stance on e-commerce, preferring to use its website mainly to drive traffic to stores. In contrast, BJ‘s has been investing heavily in its digital platforms and infrastructure, even introducing a new app feature that lets members scan and purchase items on their phones while shopping in-store.
Where Rubber Meets the Road
For all the differences in their corporate structures and strategies, the real test of Costco vs BJ‘s comes down to the in-store experience. And as a ceaseless seeker of retail thrills, I can attest that walking into a Costco is a far cry from browsing your local BJ‘s.
There‘s a certain "Costco effect" that takes hold when you enter one of their cavernous warehouses. The towering shelves, the frenetic energy, the beaming metal rafters – it all screams BIG SAVINGS! Half the fun is stumbling across surprise finds, like discounted Ray-Bans or a 6-pound tub of Nutella, that you didn‘t know you absolutelyhad to have (until Costco said you did).
Much of that "treasure hunt" appeal can be traced to Costco‘s purposely bare-bones, no-frills approach. Costco typically stocks just 3,700 unique items, compared to over 7,000 at BJ‘s and 100,000+ at Walmart. By keeping selection tight and turning inventory fast (Costco sells $1,500 per square foot, nearly 3x the retail average per HBR), Costco maintains a certain "get it while you can" urgency.
BJ‘s, on the other hand, has more of a hybrid approach that sits somewhere between a traditional wholesale club and a classic big box store. BJ‘s stores are less sprawling (113,00 square feet on average vs. Costco‘s 146,000), with wider aisles and more intuitive layouts. You‘ll find many of the same bulk deals as Costco, but also a broader array of brands and pack sizes for when you don‘t need a lifetime supply of ketchup.
Another key difference is that BJ‘s embraces promotions, sales, and coupons whereas Costco takes an "everyday low price" stance. BJ‘s arms its members with a steady stream of deal flyers, individualized promotions, and manufacturer‘s coupons (which Costco does not accept). If you‘re the kind of shopper who gets a dopamine hit from stacking deals, BJ‘s is your happy place.
The Final Verdict
So when it comes to Costco vs BJ‘s, is there a clear winner? As with most things in retail, the answer is "it depends." Both wholesale clubs deliver great value and unique shopping experiences, but cater to slightly different needs and geographies.
If you‘re lucky enough to live near both a Costco and BJ‘s (and have ample space to stash your haul), it‘s certainly worth trying out both to see which fits your taste. There are plenty of devout "crossover" shoppers who happily carry both memberships. In fact, over 20% of BJ‘s members also belong to Costco or Sam‘s Club (Pyramyd Air), so the two are not mutually exclusive.
For most shoppers though, the choice will come down to some combination of location, selection, and shopping style. If you want a truly massive assortment of top quality goods at the lowest possible prices, and don‘t mind battling the crowds, Costco is tough to beat. But if you prefer a more approachable, less manic experience with a few more creature comforts, BJ‘s might be more your speed.
Whichever wholesale club you choose, one thing is certain: you‘ll never look at a 12-pack of paper towels the same way again. Happy bulk buying!
