Tires or T-bones: You can get them wholesale BJ's shopping club opens its shelves to anyone with cash.

March 04, 1992|By Michael Dresser | Michael Dresser,Staff Writer

It used to be you needed connections to buy at wholesale. Now all you need is a pulse and 25 bucks.

BJ's Wholesale Club, the warehouse outlet chain with the most wide-open membership policy, holds the grand opening of its first Baltimore-area outlet today in White Marsh. It becomes the third general-merchandise company in the bare-beam set to open its doors in Baltimore, and its debut in the market marks the beginning of a new, fiercer phase in the region's forklift fight.

The competition has been relatively genteel. Price Club and Kmart's Pace Membership Warehouse, the first two warehouse chains in the area, have kept a respectful distance from each other. Wary of crowding their business customers, they have set qualifications for individuals and families interested in joining -- such as membership in certain credit unions or employment by the government or some large companies.

Now BJ's is opening a warehouse a few miles from Price Club's White Marsh outlet and has thrown open its doors to anybody willing to pay $25 a year ($35 for a couple) for the privilege of buying anything from box springs to beefsteaks at wholesale prices.

Over the next few years, the company, a division of publicly traded Waban Inc. of Natick, Mass., plans to ring the region with up to three more stores. BJ's president, Herb Zarkin, identified Owings Mills, Glen Burnie and Columbia as possible sites.

That's not all. Sam's Club, a fast-growing Wal-Mart subsidiary that operates twice as many warehouses as its closest competitor, will stake its claim to Annapolis this summer. If the Howard County Zoning Board is willing, it will set up shop in Ellicott City in 1993.

And nobody believes Sam's will stop there. Of the five major chains, only Kirkland, Wash.-based Costco Wholesale Corp. has said it has no plans to join the fray here.

Modern warehouse shopping got its start in 1976, when Price Co. opened its first club, and grew steadily through the 1980s.

Fifteen years later, the warehouse club business is not an infant anymore, but analysts and leaders in the business agree that its adolescent growth spurt lies ahead.

"There's still a lot of people who still aren't aware of the existence of these places," said Matthew Philo, a retail analyst with Moran & Associates in Connecticut. "They still have a lot of room to grow."

The new BJ's at White Marsh, which actually opened last week, illustrates the dynamic nature of the business.

Early warehouses reveled in their warehouse-ness, with bulk packaged goods stacked to the ceilings of their dark, sprawling hangars. BJ's, however, is lighted like a stage, and the white-painted ceiling and beams take the industrial edge off the cement-floored warehouse.

BJ's is known as the most retail-oriented of the wholesale clubs, and the product selection reflects that. In addition to the bulk cartons of cleaning products, frozen food, ketchup and office supplies are such items as Waterford crystal, Seiko watches and Leading Edge computers.

Like Pace, it has separate departments that sell fresh meat, produce and bakery goods -- in some cases at half of grocery chains' prices.

The new 115,000-square-foot warehouse contrasts dramatically with a Price Club built two years ago in Glen Burnie. Like BJ's, the Price Club has an optical department, a one-hour photo service, tire mounting and a food court, but there is little fresh food, and the atmosphere is more stark.

But change is constant in this quickly evolving business. Even as BJ's was planning its grand opening, Price Club was expanding its frozen-food section and preparing to introduce fresh meats in May. In two years, the White Marsh BJ's is likely to be scrambling to catch up with some newer competitor.

"I've opened three clubs in the last six months, and there's been a new development and improvement in every one of them," said Tom Gallagher, BJ's regional manager.

BJ's is not known as the greatest innovator in the industry when it comes to product mix. Costco was the pioneer in adding fresh-food lines, and Pace's two Baltimore-area stores have had them for several years. But BJ's membership policies do put it on the cutting edge.

Mr. Zarkin said he decided to drop membership qualifications after he decided they were "really make-believe."

Analysts said BJ's competitors will be watching closely to see how the open-door policy works. If the warehouse is swamped with people buying small amounts, they could crowd out business customers, who spend more.

If BJ's increases its traffic and holds on to its business customers, competitors are likely to drop their qualification requirements.

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