WCBS NewsRadio in New York City reports this morning that Wal-Mart is considering making a bid for BJ’s Wholesale Club, which, if approved by federal regulators, would reduce the number of major players in the membership club business from three to two.
Wal-Mart’s Sam’s Club division is a the second biggest club business, operating 520 units in the US, plus another 64 stores in Brazil, China, Mexico and Puerto Rico. The division generates close to $30 billion a year in annual sales, or roughly 15 percent of Wal-Mart’s total sales. An acquisition of the BJ’s business would add close to $6 billion in annual sales to its coffers and 140 units in 16 states to its fleet.
This would bring Wal-Mart’s club business revenue much closer to Costco, which generates about $39 billion in sales from roughly 400 stores in the US and abroad.
Wal-Mart’s Sam’s Club division is a the second biggest club business, operating 520 units in the US, plus another 64 stores in Brazil, China, Mexico and Puerto Rico. The division generates close to $30 billion a year in annual sales, or roughly 15 percent of Wal-Mart’s total sales. An acquisition of the BJ’s business would add close to $6 billion in annual sales to its coffers and 140 units in 16 states to its fleet.
This would bring Wal-Mart’s club business revenue much closer to Costco, which generates about $39 billion in sales from roughly 400 stores in the US and abroad.
- KC's View:
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No idea how close Wal-Mart may be to making this deal, and no sense of how federal regulators would react.
But it would certainly put the pressure on Costco to continue to innovate, which it seems to do very well.
