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Grocery Categories Drive BJ's Wholesale Club's Healthy September Performance

NATICK, Mass. - Food and other grocery-related product segments were the clear leaders in sales growth for BJ's Wholesale Club, Inc. in September, the company said yesterday.

September 2004 sales shot up 12.1 percent to $676.8 million from $603.5 million during the same period last year. On a comparable-club basis, sales grew 8.3 percent for the month of September. Gasoline sales, however, had a negative effect on comparable-club sales of about 40 basis points.

For September 2003 the company reported a comparable-club sales increase of 12.4 percent, including a contribution from sales of gasoline of about 4.3 percent.

Merchandise categories with the highest sales increases vs. the previous year included beer, dairy, diapers, domestics, ethnic foods, health and beauty aids, household chemicals, juices, meat, milk, paper products, pet food, prepared food, TVs, and water. Among the lower-performing categories were audio electronics, best-selling books, children's apparel, furniture, jewelry, small electronics, and toys. Additionally, sales decreased in categories that were reduced or cut completely earlier in the year, such as automotive, office supplies, and sporting goods.

Sales for September 2004 were favorably affected by the calendar shift in pre-Labor Day sales to September and by an Open House marketing event during the first eight days of the month. Additionally, three September hurricanes caused repeated cycles of stock-up and replenishment sales, which more than compensated for lost sales during the bad weather. The net effect on comparable-club sales of these events was accretive by about 1.5 percent. Costs related to hurricane-related property and merchandise damage during September came to roughtly $1 million pretax.

BJ's president and c.e.o. Mike Wedge said in a statement: "We are very pleased with our strong sales momentum going into the back half of the year, particularly in food. On a comparable-club basis, sales of food increased by approximately 13 percent, while sales of general merchandise increased by approximately 3 percent."

Comparable-club sales went up in all major markets, with the highest increase in the Southeast region. Comparable-club sales results were strongest during the first week and weakest during the fifth week.

Excluding sales of gasoline, September traffic rose about 4 percent, and the average transaction amount increased about 5 percent. During the same period last year, traffic grew 10 percent and the average transaction amount declined about 1 percent, compared with the prior year.

BJ's currently operates 154 clubs and 80 gas stations, as opposed to 146 clubs and 75 gas stations last year.

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