A new wholesale club is looking to expand into Texas for the first time, taking on rivals Sam's Club and Costco.
BJ's Wholesale Club, a membership-based retailer, unveiled plans Thursday to open 25 to 30 clubs over the next two years in a move that is expected to include several locations in the Dallas-Fort Worth region. The Massachusetts-based retailer, which has been operating for more than four decades, has 252 clubs and 188 BJ's Gas stations in 17 states.
The first stores in the Dallas area are expected to open in early 2026.
"Economic expansion and a growing population make Texas a great fit for us," BJ's Wholesale Club Chairman and CEO Bob Eddy said in a statement. “We believe our unique club model, which delivers savings of up to 25% off grocery store prices every day, will resonate with the families in this area."
The no-frills store specializes in selling groceries at lower costs than its rivals because it keeps its overhead to a minimum and purchases name brand products at a bulk discount, said Phil Lempert, the founder of SupermarketGuru.com, a site following the food and retail industry.
"They are smaller than Costco and Sam's Club and most of what they are selling are groceries," Lempert told CoStar News. "But rather than buying a 64-ounce bottle of salsa at the store, like you do at Sam's Club or Costco, you can get a 16-ounce bottle of salsa like the one you find in a traditional grocery store."
Like other retailers, BJ's chases residential rooftops, Lempert said, hence why they are making a move into Texas. The Dallas-Fort Worth region, where it's beginning its expansion, is the nation's fourth-largest metropolitan area with more than 8.1 million residents and continues to be a top destination for in-migration.
BJ's first foray into the Lone Star State comes at a time when Costco has been expanding with a new Forney store in the Dallas area, according to a state work permit, and investing in its store, warehouse and office locations in Texas. Sam's Club also recently invested $15 million in remodeling its Grapevine store in North Texas, according to a state permit, while also renovating its existing fleet of stores.
BJ's did not immediately return a request for additional information about the company's real estate expansion. The retailer, which reported earnings on Thursday, told Wall Street analysts they expect to spend $800 million in fiscal 2025 with the majority of those investments headed to new club and gas stations in Texas and a $200 million distribution center expected to add a so-called "highly automated" fourth hub to its network.
The location of the new distribution center has not been disclosed. Lempert said he expects the hub's location to be telling about BJ's expansion plans.
"They tend to put a distribution center in the center of a cluster of stores," Lempert said, adding BJ's develops new stores and takes over existing stores from rivals in both urban and suburban locations.
Texas entrance
The membership club's Texas entrance comes on the heels of BJ's expanding into Tennessee, Alabama and Kentucky in the last two years, Eddy said in Thursday's earnings call with investors.
"In 2026, we have plans to enter Texas in the Dallas-Fort Worth region," Eddy said. "Dallas-Fort Worth is a high growth market with favorable demographics. There's intense competition as well, but we're confident that our strong offering and value focus will resonate with the broader community."
Beyond Costco and Sam's, BJ's competes with traditional grocers that continue to expand in North Texas, including H-E-B, a San Antonio-based chain that has been building up an arsenal of key locations throughout the region. In January, H-E-B announced it would build its first store in the Dallas city limits on a 10-acre site at the southeast corner of LBJ and Hillcrest Road.
Other grocers such as Kroger, Tom Thumb and Sprouts are also expanding and renovating existing stores in various cities in the North Texas region.
"Texas is becoming a more food-centric state than ever before" and people looking to save money on groceries need more choices, Lempert told CoStar News. "This brings a new player to the Texas market, and we'll see other grocers lower their prices to compete."
Each new BJ's will offer curbside pickup, in-club pickup and same-day delivery and is expected to create between 100 and 150 jobs. Like grocery prices, Lempert said he also expects grocers to compete for workers.
BJ's is designed to appeal to grocery-minded shoppers, with a large assortment of fresh produce, bakery goods, as well as meat and dairy items, according to the company. BJ's also sells electronics, toys and apparel. For members, BJ's claims it can save up to 25% off regular grocery store prices with additional savings on gas.
BJ's plans to open four new stores this year, including two in Florida at Delray Beach and Casselberry, as well as one in Warner Robins, Georgia, and one in Sevierville, Tennessee. The BJ's location in Delray Beach will be a BJ's market, which is the second of its concept clubs.
The 25 to 30 new stores includes a few previously announced locations that had their openings pushed into early fiscal 2025, which began on Feb. 2. In the past month, BJ's opened stores in Brooksville, Florida; Myrtle Beach, South Carolina; and Southern Pines, North Carolina.
Other previously announced stores with openings pushed to early fiscal 2025 include Whippany, New Jersey, and Staten Island, New York.