BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) Q4 2022 Earnings Call Transcript

BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) Q4 2022 Earnings Call Transcript March 10, 2023

Cathy Park: Hi, everyone. Hello. I think it’s 8:32. So we’ll get started now. Good morning everyone. Thank you so much for coming out here. Welcome to BJ’s first ever Investor Day. I’m Cathy Park, VP of Investor Relations here at BJ’s. It’s great to see everyone here in person today. And I’d also like to welcome those participating virtually on our webcast as well. Before we start, Bob reminded me to get my clicker and I forgot. So before we start, I’d like to draw your attention to the safe harbor statement included in today’s press release. During our presentation today, we may make forward-looking statements within the meaning of the federal securities laws. These statements are based on our current expectations and involve risks and uncertainties, which are referenced in our SEC filings and our most recent Form 10-K to be filed with the SEC next week.

Finally, please note that on today’s call, we’ll refer to certain non-GAAP financial measures that we believe will be useful for investors. Reconciliations to the most directly comparable GAAP financial measures are included in the appendix to this presentation, which you will find on our investor website — Investor Relations website. A quick overview of the agenda today. We’re excited for you to all meet our talented management team, who will run through some presentations for a little under two hours at which point we’ll take a 15-minute break and then reconvene for Q&A. With that, I will turn it over to Bob Eddy, our President and CEO. But before I do, we will kick it off with a video.

Bob Eddy: Good morning, everybody. Thank you for joining us here today. We’re thrilled to welcome you to our first Investor Day here at our new Club Support Center. Those of you who have been to our previous facilities, we’ll certainly notice a little bit of a difference. The state-of-the-art space represents our brand. It promotes teamwork and collaboration, and it facilitates providing the best possible support to our clubs and distribution centers. It’s really just one way that we’ve met our cultural promise of taking care of the families that depend on us. It’s also significantly more cost efficient, I promise. It’s a great win-win. I’d also like to thank everybody that’s joining us virtually through our live stream. I’m sure a lot of our team members are on as well, so grateful for everybody listening in.

We’ve got an exciting day ahead of us. So why don’t we just jump in. We are incredibly proud to have announced our record fourth quarter results this morning. We grew net sales in the fourth quarter by 13% to $4.8 billion and put up an impressive 8.7% merchandise comp driven by nearly equal gains in traffic and ticket. Our value prop continues to resonate, driving our market shares up and driving our members into our clubs. Membership fee income grew by 8% year-over-year, topping $100 million for the first time in any quarter, and we hit our all-time high renewal rate of 90% for the year. There’s a huge accomplishment for us. And given it’s important, you’ll hear a few of us talk about it today. Our fourth quarter adjusted EBITDA grew 19% year-over-year, and adjusted EPS was also a record for Q4 at $1 per share, up 25% over last year.

Our strong fourth quarter capped a milestone year for us. We leaned into our strengths against a challenging operating environment and our members rewarded us for — with their trips and their wallets. Our fiscal ’22 net sales grew 16% to almost $19 billion and merchandise comps were up 6.5% for the full year. Membership fee income grew by nearly 10% to $397 million last year, and we surpassed $1 billion in adjusted EBITDA for the first time ever. Adjusted earnings per share also grew, 21% year-over-year to a record $3.92 in fiscal ’22. I’m extremely grateful to each and everyone of our 34,000 team members. They show up every day for each other and for our members to deliver an unbeatable shopping experience, and these results are all due to their efforts.

For those of you that are following our story since we went public in 2018, you’ve heard me talk about our company’s transformation and the investments that we’ve made to strengthen virtually every aspect of our business. We’ve grown our membership with a renewed focus on retention and lifetime value. We are delivering even more value through better merchandising and promotions. We expanded our digital capabilities to offer even more convenience to our members and we have reinvented our club opening model to expand our chain profitably. These investments have allowed us to deliver the great growth that you see on this slide. Since fiscal 2018, we have exceeded every goal that we’ve set. Our net sales have grown almost 50%. Our MFI has grown 40% with tremendous gains in membership count and quality and not to mention that record renewal rate of 90% again.

And adjusted EBITDA grew about 80%, and we have nearly tripled our adjusted earnings per share over that time period. We generated over $2 billion of free cash flow cumulatively since 2018. And this has allowed us to transform our balance sheet, ending this year with just 0.8 turns of leverage down from roughly five turns pre-IPO. We’ve also taken some of that cash and rewarded our shareholders with it as well. Since our IPO, we’ve repurchased nearly $0.5 billion in shares, and we’ve delivered a total shareholder return of 236%. That’s nearly 4x the broader S&P 500 index and among the same — among the top performances in retail. As we think about our long-term financial algorithm, we believe we can build on this momentum and achieve low to mid-single-digit annual merchandise comps, mid-single-digit total revenue growth.

And when we add in a bit of MFI growth and a bit of margin growth, we can deliver high singles to low double-digit annual earnings per share growth. Today, we’re here to talk about how we do all that. First, let me step back and take you through our model, which offers tremendous structural advantages. We strive every day to operate as efficiently as possible so that we can pass more value on to our members. There are many examples of how we are more efficient than other forms of retail on this page, and let’s just pick one of them like labor. We all know what the recent wage pressures in the economy. We have significantly less labor than our higher-priced competitors. Therefore, in an environment like we are in today, many of our competitors face larger pressures than we do.

I should also take another moment to thank our team in the field who work hard every day to be as efficient as possible. And they do this because they know the virtues of our model. We take every bit of efficiency that they find for us and continually reinvest it back into member value. We’ll talk today about pricing, promotion, our fabulous gas prices and our amazing credit card offer as examples of this. Value is the most important product that we sell. We offer 25% better pricing than our grocery competitors. And in exchange for that value, our members reward us with spend consolidation, loyalty and retention. In other words, they give us lifetime value. As a result of the tremendous advantages that our model provides and the value that it gives consumers, we continue to take share from less efficient forms of retail.

The U.S. warehouse club industry has grown at a 6% rate since 2007. It’s grown in good years, it’s grown in bad years. But the past five years have been especially exciting, growing at an 11% rate outpacing broader retail at 8% and grocery at 6%. Further, despite our outside growth — outsized growth, the industry is still less than 5% of total retail. So we believe there is much more growth to come. You’ve heard me say that we are a different and a better company today built on our strategic priorities, which are improving member loyalty, giving our members an unbeatable shopping experience, delivering value conveniently through digital means and growing our footprint. The successful execution of these strategic priorities is only possible with a team that embodies a culture of operational excellence, and one that exercises cost and capital discipline.

We’re going to spend a moment on each of these things. First, our membership base is the most important and valuable asset that we have, and it has never been stronger. I’m so proud of what our team has delivered in this area. Since fiscal 2018, our member count has grown 27%, and we now serve 6.8 million members at the end of January. We delivered on our goal of our tenured renewal rate at 90%. This is up 3 points from 87% in fiscal 2018. It’s such a fantastic milestone for us, and Tim will talk through the math around why that is. We also ended the year at 38% higher tier penetration, up 13 points since fiscal 2018 and up 3 points year-over-year. These are our best members, and we believe we have much more headroom to grow the programs driving that penetration.

As a bit of perspective, we have consistently grown our membership fees each and every year for the past 25 years, increasing it at about an 8% rate. I’m especially pleased with the performance over the past five years. Our efforts in improving membership acquisition, loyalty and retention, coupled with our new club growth, have resulted in MFI growing at 9% rate since fiscal 2018 and 10% last year alone. Also, to be favored focus on the renewal rates at the bottom of the chart, we’ve spent the majority of our history in the low 80% range. And when I think about our transformation, I think about the difference between 81% and 90%. It’s the single biggest reason that I’m confident in our future. Speaking of things to be proud of, we launched our new co-brand credit card on February 27, and it is off to a fantastic start.

We are thrilled to bring what we think is the best card offering in retail to our membership with an amazing partnership with our friends at Capital One. Our credit card members have contributed significantly to the growth in higher tier penetration over the years and the program has grown about tenfold since we launched it in 2014. These are some of our most valuable members due to their deep loyalty. In fact, our credit card members have almost 2x greater lifetime value than those members that don’t have that product. We’ll focus on this a bit later as we continue to believe this will power our growth forward. Okay. Let’s talk about value a little bit. There are many ways that members can find value with us. From our everyday low prices, further amplified by great coupons and promotions to our own brands to low-priced gas.

The co-brand credit card I just talked about. All of these savings can aggregate up to 10x our membership fee, which is an incredibly compelling return for our members. With the importance of value in our model, we remain laser-focused on providing the sharpest price points we can across our entire business strategically investing in areas that matter most to our members. These intentional pricing investments improved our pricing position by 130 basis points last year against a composite of all of our competitors in mass and club and grocery. We made these investments during a period of robust inflation, demonstrating our commitment to providing value to our members. This relentless focus on value has resonated with our members, as you see on the right-hand side of the chart, driving consistent growth in both trips and spend per member across all income cohorts, high, mid and even low.

As a result, we’ve steadily grown our market shares by almost 0.5 point over the past several years with gains across grocery, perishables and our sundries business. We believe we will continue to gain share, and Rachael will tell you a little bit about why. Shopping with us is more convenient than ever due to our digital offerings. We know that convenience drives spend as digital engaged members spend about 70% more with us than those members that only shop with us through traditional means. Our digital-enabled sales have grown from just 2% in fiscal 2018 to 9% today. Our BOPIC and curbside pickup offerings have led this growth now making up about half of our digital sales. And we are not done at 9%. We will continue to invest in enhancing the digital efforts for one simple reason.

If we can save our members 25% while we’ve saved them time, they will come back to us again and again and again. On to our real estate footprint. We have a leading presence on the East Coast, operating 237 clubs and 165 gas stations in 18 states. Every single one of our comp clubs is profitable, and we are the market share leader in the Northeast and have growing shares elsewhere. And we are quickly expanding that reach. Five years ago, we were opening one new club per year, and now we are doing around 10. And our new clubs are performing better than our expectations, giving us more confidence to go faster. Last fiscal year, we opened nine new clubs and seven new gas stations. We aim for 11. We had two additional clubs slated for last year that were delayed a little bit by the hurricane.

Those two clubs in Davenport, Florida and McDonough, Georgia opened in the last couple of weeks and are doing fine, they’re doing fantastic. So congratulations to those teams for their perseverance and for their performance so far. In addition to those clubs, we expect to open 9 or 10 more this year, including getting into our 19th and 20th states with new clubs in Nashville, Tennessee, at Huntsville, Alabama. We also expect to open as many as 15 gas stations during the year. We’ve allocated our significant cash flows over the past five years with growth and shareholder value in mind while we transformed our balance sheet. As we look to the future, we will continue to invest in growing our business and returning excess cash to shareholders while maintaining that great balance sheet that we now have.

Laura will speak a lot about this later. I talked about the strategic nature of our transformation. It is important to pick the right things to do, even more important in my view is we pick to do those things. And I’m honored to be working alongside my senior team and our greater team as we continue to build our company. You’ll hear from many of our world-class leaders today. And if you take absolutely nothing else away from this presentation, I hope you come away from it feeling as good about them as I do. I’d put them up against any team in retail, and I think they win. All right. So what are you going to hear next. You’ll see that our presentations today follow the general framework of our strategic priorities and how they contribute to our long-term growth story.

First, you’ll hear from Paul Cichocki, our Chief Commercial Officer, who will talk about how we approach the business with a member-first mindset. Next, you’ll hear from Tim Morningstar, our Chief Membership Officer. Tim joined us in 2020 from Bain & Company, and leads our membership and marketing efforts. He’ll present on how we’ve strengthened our membership, why we think those efforts are sustainable and why we’re so excited for the future. Rachael Vegas, our Chief Merchant, joined us a little over a year ago from 20 years of retail experience at great companies like H-E-B and Target. Rachael has charged with taking our merchandising from good to great, and she’ll walk you through the key points of that journey. Following Rachael, will be Monica Schwartz, our Chief Digital Officer, who joined us in 2020 from Home Depot, where she led their online merchandising efforts.

Monica will delve into our digital journey and our future opportunities to drive growth through offering more convenience. Bill Werner, who many of you already know, is the key architect behind our real estate strategy and the Godfather of our co-brand credit card. He will talk about our new club performance and our plans for future expansion into new and existing markets. And finally, our Intrepid CFO, Laura Felice, will come up and talk about how we can distill all this down to the numbers and what you can expect from us going forward in a little bit more detail. For those of you joining in the Club Tour, after this, Jeff Desroches, our Chief Operations Officer, will lead that tour. He’s been with us for 22 years, and he oversees our operations of all of our clubs and gas stations and our supply chain.

All right. Next up is Paul Cichocki, our Chief Commercial Officer. Paul joined us in 2020 from Bain & Company. I’m thrilled to have him as a partner in our growth story. He’s got a great way of thinking about the business and incredible capacity for transformation, and it’s a lot of fun to be around to. So take it away, Paul.

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Paul Cichocki: Good morning, everyone. Bob just talked about our structural advantage as part of the club channel. I want to build on that and talk about how our go-to-market model is differentiated across retail and within the club channel. We’re differentiated from our club competitors because we have a broader assortment, about 2x the SKUs of our club competitors, those still curated at 7,000 SKUs. We have smaller pack sizes in the club range. We have a smaller club format at 100,000 square feet, and we’re — we have greater density translating into more convenience in the shop for our members and greater member trips. This adds up to a differentiated experience for our members who can fully supplant their grocery store shop at BJ’s Wholesale Club.

Simply said, our competitors cannot do that. We are differentiated versus grocery. First and foremost, because we’re 25% cheaper on products we stock, but we also offer a treasure hunt experience as well as services and fuel. We’re differentiated versus mass on pricing. And I’d like to challenge you to do the following math exercise. Take your favorite mass retailers profit margin to zero and invest all it in price. Their prices would still be substantially higher than ours. I’d like to spend just a couple of minutes talking about who is it the consumer that we serve. We aim to provide the best value proposition in retail to smart-saving families, but who are smart saving families and what do they value? Smart Saving families want the best for their friends and family.

They’re generous and they’re social. Their enthusiastic budget stretchers who want to spend their money in a way that allows them to get the most out of life. As a result, they’re savvy and price conscious, treat saving money as a sport, get excited about promotions and deals, attracted to name brand products, prefer to stock up and enjoy entertaining family and friends. Thus, our primary commercial objective is to attract, engage and retain smart-saving families, period. We know that if we do what’s best for our member, great financial outcomes will follow. It starts with targeting the right prospects who fit our design target, the smart-saving families. We target the smart-saving family psychographics and demographics that we know will yield attractive customer lifetime value.

We then engage them with assortment that meets their needs. As I noted earlier, a broader assortment than our club competitors, though still curated. We also engage them with exciting promotions which are seasonally relevant and personalized and curated offers that are formulated through their highly trackable shopping and browsing behavior. We also ensure that our in-club and online experiences are fun. We retain our members, first and foremost, by ensuring that they get that high ROI on their membership investment, as Bob noted. In fact, during the pandemic, we invested an additional 130 basis points into price as Bob noted, and have reaped the benefits of that in terms of member satisfaction and their personal ROI. We also ensure that we are clearly communicating back to members on how much they have saved.

Tim will cover the details of these engagement strategies in his remarks. Beyond that, we work to get as many members as possible into our premium membership offering whether that be our higher tier membership or co-brand cards. Tim will talk about the direct relationship between these offerings and retention. And finally, we ensure that we meet members where they are, which is to say, through a world-class digital experience that allows them to shop in the most convenient and immersive way possible. Monica will share how the majority of our members utilize digital assets in their shops regardless of whether the transaction is in the club or online. In a moment, Tim, Rachael and Monica will go into more detail on our strategic commercial priorities.

But I would be remiss if I didn’t first talk about one of our most strategic functions deployed in the service of great commercial outcomes. We have four analytic functions that make sophisticated use of data and exploit our perfect information on member behavior for optimal decisions in merchandising, pricing, promotion, personalization and engagement. The first three functions on this page support the creation of promotions that accomplish what I call the ROI Trifecta and ROI for our vendor, and ROI for our members and an ROI for us. They also developed personalized offers that are designed to engage members with highly relevant incentives to get them shopping and improve their personal ROI on their BJ’s membership investment. And of course, they also help us with things like category optimization and pricing investments as well as prospecting.

These analysts and data scientists that we employ in this function are part of the secret sauce of BJ’s Wholesale Club. In addition, we have a dedicated member engagement team that monitors and cultivates our most important asset, our members and their behaviors. They work to get each member to their full potential through education, incentives and the right interactions. As we pursue actions that are aimed at profitably serving our member needs, we need to be clear on what success means for our members and for us. We measure our success through a member-centric lens. Our measures fall into four areas: member ROI, as Bob noted, member experience as measured by NPS and voice of the member survey, their digital engagement as measured by digitally-enabled revenue, shoppers and app usage and member lifetime value.

If we succeed on these measures, the financial outcomes for our shareholders will follow. Tim, Rachael, Monica will talk about more — we’ll talk in more detail about our performance across these measures. I want to close out my remarks with a brief overview of what you will hear from our commercial team today. They will share details on a set of priorities that build on our current performance and take our member experience and financial outcomes to the next level. In membership, Tim will talk about further improving our value proposition, further leveraging data to drive personalization and modernizing our core message. In merchandise, Rachael will talk about our journey from good to great and improving our assortment for increased relevance while continuing to deliver tremendous value.

She’ll talk about innovation, making our clubs even more fun to shop. She’ll talk about own brands and how they deliver on the trifecta of value, loyalty and healthy category dynamics. Rachael will also talk about our investments in talent, where she is deepening the talent pool and supporting them with world-class development and training. In digital, Monica will talk about the digital experience and how our digital conveniences are driving tremendous value for our members. She’ll talk about our progress on digital penetration driven by world-class digital engagement. She’ll also talk about our plans to further elevate the member experience. They’ll be followed by Bill who will talk about our footprint strategic priorities. With that, let me introduce Tim Morningstar.

Tim was my partner at Bain & Company for 20 years before he joined BJ’s. While at Bain, he focused on growth strategies for a wide range of consumer companies, retailers and loyalty-based companies and led a number of strategic due diligences on both large and small consumer-focused brands. With that, I’ll hand you over to Tim Morningstar.

Tim Morningstar: Thank you, Paul. Well, Paul didn’t mention is that in 2002, he was my very first supervisor. And here I am still working with him 20 years later or for him, I should say, 20 years later. So make of that as you wish. As Paul said, my name is Tim Morningstar. I run the member and marketing functions here at BJ’s. And as — has already been said in this presentation and will no doubt be said again, our 6.8 million members are our greatest asset and our biggest differentiator. On the left-hand side of this page, you can see our five-year membership growth rate exceeds 6% per year, a rate that has remained consistent through pre-COVID to today. On the right-hand side of the page, you see that MFI growth has exceeded our strong membership growth, the result of an increasing mix of members to our higher-priced tiers.

It’s worth noting that our last MFI increase is included in the 2018 number, indicating that this growth has been done without an increase in our membership price. So continuing to strengthen this asset is at the core of our strategy going forward. We put member loyalty at the core of our strategy for a very simple reason. It drives outsized economic returns. And I’ll use this page to simply illustrate that point. We’ve done some simple math, which shows that over a 10-year time horizon, for every single point of renewal rate improvement we achieved, we retain an additional 175,000 members. Applying known member behavior to that population over the same time horizon implies that each point of improvement can increase cumulative revenues by approximately $4 billion.

The other benefit to improved retention is higher lifetime value. We’ve learned over the years that the longer a member is in the franchise, the more they will leverage the full range of our value prop, which means the more they will spend with us, which means the more likely they will be to renew, which means perhaps most importantly, the more likely that they will act as a brand advocate, recommending us to others. So the point we’re making here is relatively simple. Even small improvements in rate have a cascading positive impact on the business. Now as a team, we don’t focus on renewal rate per se, but rather the behaviors we can drive and the levers we can pull that will lead to loyalty. One of the things that is great about our model, and we’ve mentioned this already, we have literally decades of perfect shopper information on our members.

We are constantly mining that data to highlight concrete actions that will lead to loyalty. Let me spend just a moment to highlight a few of these by going clockwise around this circle. The first lever we lean into is participation in our higher tiers of membership. We know that if a member enrolls in the $110 membership or gets a BJ’s branded credit card, we will not see just improved renewal rates, but increased spend per year. Our highest tier members generate a multiple of lifetime value versus our base program members. We look at this number daily, and that has paid off. Higher tier penetration assets, as Bob mentioned, at 38%. That’s up 13 points over the past five years and we think we have much more to go on this. I will speak more about that in a moment.

The second lever is engagement with our promotions. Our members love the value they can realize through these programs and not surprisingly, those who engage with promotion spend the most. One way to look at this is percent of members who engage with a digital coupon. 70% of our coupons are now clipped digitally. This is up from 20% in 2019. Now this drives loyalty because it is a much smoother way for us to deliver value to our members. This ease for members translates into increased engagement, but also improved lifts on the promotions. It’s also more cost effective to exercise promotions in this way. The third lever is overall digital engagement, and Monica will speak about this in depth later today. But digitally engaged members spend and renew at a higher rate.

Monthly average or monthly active users is a simple metric that we used to track this, and we see it has grown 5x in the past five years to 3.2 million monthly users today. The fourth lever is our easy renewal program. Eliminating friction in the membership renewal process is key to driving renewals, and we’ve moved it all easy renewal from 53% five years ago to 79% today. Finally, perhaps the most important driver of renewal rate is the simple value we deliver to our members every day. When we look at the savings we provide as measured by discount over grocery store pricing, fuel savings and all the other value we pass along, the average BJ’s member can see a 10x return on their membership fee. Our model will continue to enjoy success for as long as we can deliver both this value and make sure our members see it.

So as I mentioned at the top of the slide, we know that if we can drive certain behaviors, loyalty will follow. And as we will see, that model has played out. So on the left-hand side of this page, we see that renewal rates, as Bob mentioned, that for years, hung out in the low 80s grew to the mid-80s around the time of our IPO and are now hitting 90%. The little row along the bottom, while not necessarily surprising given the bars, is nonetheless interesting. Our improving renewal rates have led to increased member tenure. And as we know, more tenured members are better members. The right-hand side is just a little outside validation of the numbers. DunnHumby released a measure of brand loyalty in our sector a couple of weeks ago, and we are proud to say that BJ’s was in the top quartile, coming in tenth out of 63 total companies.

That is a 12 spot improvement versus 2020. And five spots ahead of where we were last year alone. This was among the greatest improvement across all retailers covered. Our internal measures of loyalty are very consistent with this and also reflects that we’ve significantly close the loyalty gap between us and other leaders in our industry. So we’ve come a long way as a brand and as a business, but we are obviously not stopping here. As we look forward to the next five years, we have a clear path to continue to grow this membership asset. So let me pivot to that right now and speak briefly about three key elements of our membership strategy going forward. First, is continuing to invest in our value proposition. We need to always be thinking of ways to create value for our members.

Second is leveraging the massive amount of data we have to create a highly relevant and well curated experience for our members. And third, we need to ensure that we are 100% on brand message and hopefully, you guys would agree we’ve been. So today, we are 25% lower than grocery store pricing. We have incredible gas value and our assortment fits a wide range. Rachael will talk more about that in a moment. So on the value proposition, it is a great time to be talking about value proposition. As you know, we’ve just rolled out a new credit card program in partnership with Capital One. In addition to all the benefits our members will enjoy from partnering with a world-class player in this space, and in no small part, thanks to the Godfather, Bill Werner, this deal offers superior economics to the previous program.

And our philosophy from the start has been to reinvest that value. It’s been to reinvest that value back into our membership. So let me walk you through our new set of premium membership offerings, starting with our Club Plus Card. This membership continues to cost $110 and brings 2% back on in-club purchases. The news for our members here is that we’ve added an additional $0.05 per gallon discount to this program, where there previously was no discount on top of our already low pricing. This is something we have tested in smaller markets over the past couple of years, and feel like now is the time to bring that program to the whole chain. Additionally, we’ve removed the expiration on awards members will earn. And not surprisingly, our members are telling us they love this program.

If we move across the page, we can start to talk a bit about the credit card program. I’m losing my slides here. Okay, credit card program. And we’ll begin with the one card, our co-brand card that attaches to our base membership at no additional cost. In addition to the 3% reward earned and $0.10 off a gallon that this card has always offered, we have removed award expiration and moved to a simple 1.5% flat earned across all outside club spend. Finally, let’s set the card I’m most excited about, the one plus card. This credit card that attaches to our $110 membership. This card, the in-club earn is still 5%, but we bumped the fuel savings to $0.15 a gallon and have added a 2% earn on all spend outside the club. This is truly an industry-leading set of benefits.

So the strategy here is really not complicated. We are meaningfully investing in our value prop to trade members to higher tiers. We think this is great for us, but more importantly, we think this is great for our members. Okay. The next leg of this tool is leveraging our massive amount of data to deliver more relevant content and this is where, in an interesting, albeit highly self-destructive way, it felt like the best way to bring it to life was to publicly expose the shopping habits of not one but two of my supervisors. So we have Bob and Paul and just a sample of the type of data we’re able to understand about our members. So we obviously have all the basics, age, income, et cetera. We’re also able to model that Paul apparently has a deep interest in gardening or at least the modeling you believe you should have an interest in gardening.

This is something for those of us who know him is potentially questionable. Let’s talk products, Bob, whip cream guy and bacon, Paul likes meatloaf. Bob actually thinks we listened to him because he’s the CEO that’s modestly true, but it actually turns out at 38,000 members — $38,000 he spend, he’s like literally our best member. So we will do whatever he says. Bob is not — Bob is a hardcore online shopper, Paul, less. So Bob clips tons of coupons, they both spent tons of money on gas. Look, the point here is we know a ton, which while interesting, is not really worth that much unless we can effectively deploy it for sort of peaceful purposes. Something I think we’ve historically done well, but there’s so much more upside that we are uniquely positioned to capture.

So let’s bring that to life with four simple examples of how we’re doing it. First, and hopefully, this one you’ve all seen, we have worked over the past couple of years to blast members with their individual savings, whether it’s in the app in personalized videos that we send out multiple times a year and post cards that come around the time of renewal. We are leading with the personalized content we are most proud of, and that is the savings we can generate for member. A second way we use this data is around engaging members in channel of preference, a new member that has never shopped and probably hasn’t opened many of our e-mails. So we have a bunch of triggers in place so that if you don’t show up in the club after you joined, you’ll get a post card in the mail that will encourage you to come in and shop.

We also use this data to take good members and make them great. Let’s say you shop once a month, we’re going to send you something to try to get you shop twice. Let’s spend a — let’s say you typically spend $100 on a trip we’re going to send something to help us then $150. Or let’s say, like, Bob, you’re an incredible gas member. But unlike Bob, you don’t make it into the club. We can set and target these people with offers around spending a threshold in the club, which would generate a discount off of gas because we know that, that messaging resonates with them. Maybe last example I’ll call out is that we’re always looking at ways to engage EBT members. For an EBT member that is maybe shopping in the first couple of days of the month, how do we get them to come back later in the month?

And what can we do to incent them to do that? So our data is what allows us to do all of this. And by doing it this way, we ensure we get the most incrementality and the highest ROI out of this type of investment. So these are just four simple examples of the type of things we do today and we are extremely bullish on our opportunities to continue to progress this capability. The last area I’ll touch on is the focus we are bringing to our message. Our value prop, and I said this a hundred time is not complicated. We have tried to capture this in our recently launched absurdly simple savings campaign. We want to carve out a unique space for ourselves that does not mince words around what we bring to our members, simple savings. In new and existing markets, we want to constantly reinforce our core message.

I’ll say it again, 25% below grocery store pricing, great prices on gas, a one-stop shop. It should not take work or require nuance to understand the value that we’re creating. They’ll actually be during the break, we’ll have some of this campaign playing on loop. So you can get a taste of what we’re doing in the market today. We also wanted a tagline to be a genuine reflection of how we view the business and how we view our culture. We are fun. We do not take ourselves too seriously, but we remain ruthlessly focused on delivering value to our members. So as the rest of this day unfolds, and you hear about all the work being done in merchandising, in digital, in real estate, et cetera, know that absurdly simple savings underlies that thinking as well.

All right. Enough about membership and marketing, let’s pivot to the stuff we actually sell to lead us on that journey is my colleague and a great resident — former resident of the state of Maine. I feel I always have to say that, Rachael Vegas, our Chief Merchant.

Rachael Vegas: Good morning, and thank you, Tim, for that kind introduction and letting you all know I’m from Maine. I joined BJ’s nearly 18 months ago. And at that time, I was looking for a successful organization with a growth mindset. And what I found at BJ’s was an incredible foundation of success with a growing member base and strong market share position. However, the merchandising team has spent the past few years rightfully focused on reliability and supply chain efficiency to support our members’ needs during the pandemic. Now there’s tremendous opportunity now to introduce new assortment, enhance our current assortment and bring newness and innovation to our members. Simply said, this is an opportunity to take the merchant organization from good to great.

We have a very experienced and loyal team to help us do that. We know that we have millions of members who love our value proposition. And they’ve driven our market share from pre-pandemic levels increasing 69 basis points in grocery, 47 basis points in perishables and 26 basis points in sundries. Going from good to great and our nondiscretionary businesses means deepening our existing member engagement by improving our freshness and localizing our assortment. In our general merchandise categories, getting to great starts with delighting our members with a compelling assortment in home, seasonal and apparel. We can capitalize on the great traffic and high repeat visits we see in our nondiscretionary businesses by showcasing improved general merchandise assortment and encouraging our members to increasingly shop those categories.

We established our merchandising vision over a year ago, and it is our enduring focus. We know that our members shop many different channels to meet their family’s needs. And we want to be their first choice, their first stop by saving them money on their needs and inspiring them with the unexpected. When we provide our members, with an amazing assortment at a great value and a compelling shopping experience, our members save money and find great products for them to health care for their families. To achieve our vision, we are focused on four key strategic priorities. First, our growth and capabilities begin with talent. Next, assortment and merchandising that is focused on what our member expects is locally relevant and merchandise in a compelling way that conveys tremendous value.

In addition, innovation and newness is core to our success. And we will continue to introduce new product and new ways of bringing our assortment to life in the club and online. And finally, our own brands, Berkley Jensen and Wellsley Farms represent a key part of the value proposition and drive great profitability for BJ’s. Our ultimate goal is delight our members. Our member-centric approach will result in new members and outstanding retention rates. Outstanding talent has been a critical component of our success to date and will continue to be the foundation of our success in the future. Our team already has great experience in the club channel with really strong operational expertise. We’re committed to providing new tools and investing in our team members to further develop their skills, while also welcoming in fresh thinking and experience from other channels.

In the past year, 2/3 of our leaders are new in position, either promoted internally or joined BJs from another company. We’ve promoted nearly 1/3 of our merchants more than 10% of our planning and allocation team and we’ve created new roles to help further our strategic initiatives. I could not be more excited about the quality and capability of this merchandising team. It is the best in retail. We know our members choose their weekly grocery shop based on produce and meat. They are certainly choosing BJ’s because of our outstanding fresh assortment, and for our full service deli, which is a key differentiator in the club channel. Overall, our perishables business, led by Mike Leary, who is in the room with us today is responsible for approximately 35% of our sales today, and we think it can be even more important in the future.

Fresh 2.0 is what we call this initiative to improve freshness and our initial focus is on produce. We began by listening to our members. We asked them what they loved about our produce department and what they thought we could do even better. Fresh 2.0 evaluates every aspect of the produce assortment and produce supply chain to enhance the quality of our product and deals with freshness that our member experiences when they bring their BJ’s produce home. In sourcing, we are elevating our relationships with suppliers and building direct relationships with greenhouses, that can reliably and consistently produce high-quality product. We’re shortening days from farm to club, leveraging team drivers and writing orders to shorten the time that produce sits on trucks and in our warehouses.

We are also evaluating pack sizes so that our members still enjoy our club value. But it’s an amount that they can consume when the product is at its freshest. In many cases, smaller pack sizes means more members will try our product and they’ll come back more often to replenish. We’re also improving the packaging itself, increasing the transparency so that our members can evaluate the produce inside without damaging the product in it. We’ll introduce these changes with more compelling displays in club and an updated signing package that conveys freshness and quality and value, and we’ll pilot this experience in our Florida clubs leader this spring. In addition to produce, we have seen really strong growth and a lot of relevance from our prepared foods assortment.

Here too, we’re evaluating our assortment, our packaging, our presentation. Our goal will be to provide meals that are seasonally and trend right and enhanced with improved presentation and visual cues to convey freshness. Expect to see a new product as the year progresses. Our sundries and center store grocery business is at the center of the value we deliver to our members and represents more than half of our total sales. Our structural advantage and strong supplier relationships coupled with a true member-centric approach to our assortment and strategy enables us to deliver exceptional value on the brands our members love. It is critically important that we continue to partner with our suppliers to deliver on this promise and expectation.

We’ve spoken to you about simplification in the past, and you will have an opportunity to see it come to life when you visit our club after this session. Chris DeSantis, our SVP of Sundries and Services leads these efforts. He’s also in the room today. This process is grounded in deep analytics regarding member preferences and viable substitutions. It was intended to create a more curated shopping experience to allow for better assortment navigation. Improving the visual presentation makes it easier for our members to find what they are looking for. Moreover, our curated assortment encompasses the brands and items that our members care about most. So they don’t have to browse through aisles of product to find what they need. As you can imagine, this assortment is also more operationally efficient, and we pass these savings on to our members.

We began this process two years ago in grocery, and we’ve recently completed several rounds in our health and beauty categories. The results have been very encouraging. The average SKU reduction was approximately 31%. And while we sign an initial sales dip, momentum has been building ever since in recent periods and a more streamlined assortment enabled us to grow profit by over 200 basis points. Our market share is also performing well as we nearly doubled the market growth rate in Q4, and we’re approaching our pre-simplification share. This is a continuous process. As trends change and new items are introduced, we will continue to evolve our assortment always with a thoughtful eye to create an easy shopping experience and an efficient supply chain to allow us to offer compelling value to our members.

With our pandemic focus on a reliable supply chain and ensuring that we could meet our members’ needs, the food business substantially outgrew our general merchandise business in recent years. When our members come to BJ’s for their weekly grocery shop, we want to inspire them with incredible products, quality and value and general merchandise. Some of our GM businesses are already a destination for our members, such as TVs. They know they will find a thoughtfully curated selection with the best brands and exceptional prices. However, most of our GM businesses are meant to inspire and create discovery and a treasure hunt of great brands, products and deals, and this will be our focus in the coming year. As I mentioned before, talent is the first of our four strategic pillars.

This past year, we have welcomed a new SVP of GM, Dion Evans, a seasoned leader with deep merchandising experience focused on general merchandise and food. Additionally, Dion brings retail experience in finance, supply chain and merchandise planning. We also welcome Theresa Schmidt as the VP of Apparel and Home. Theresa is an 18-year veteran with deep relationships in the industry, a commitment to understanding our member and a keen eye for what is trend right. The industry has long lead times, but you will start to see the impact of our new strategy starting to hit clubs this summer and more meaningfully in the back half of this year. I have had the privilege of seeing our holiday home set for Q4 in our indoor furniture set for later this year.

And I cannot wait for all this new product to hit the sales floor. You can expect elevated quality, a new clean trend right aesthetic and importantly, amazing value. This work, coupled with a thoughtful buy strategy will deliver high-quality sales and enhanced profitability. In apparel, we’re focusing on the brands that our members love the most. We’re actually exiting dozens of brands that aren’t meaningful to our members. We will offer amazing value on compelling and recognizing brands, and we’ll continue to pursue partnerships that matter most. You can expect to see a refreshed assortment of Levi’s, Dickies and Champion, but also new and exciting brands like Real Life and Not Your Daughter’s Jeans. We’re also revamping our Berkley Jensen brand in our style categories and for the first time, introducing women’s, women’s active and kids in this brand.

Newness in general merchandise and newness is key in general merchandise and in addition to introducing new brands and silhouettes in apparel, we’re giving toys a makeover. This holiday, more than 80% of our toy assortment will be new. In the past, we’ve led our relationships with key suppliers deteriorate. We had moved to a very complicated and transactional relationship with lower tier partners. We are now engaging with all of the best leaders and brands in toys, like LEGO, NERF, Barbie, Melissa and Doug and Discovery, to identify toys that kids want at a value that parents expect at BJ’s. Newness is the lifeblood of retail and 75% of our members tell us that they expect to find innovation and newness at BJ’s. This has become a key tenet of our strategy.

There will be two primary areas where we bring innovation to life in our clubs. First is our destination categories. These are the categories that are among the key reasons a member comes to the club to shop. Categories like fresh, center store grocery, frozen and sundries. Our goal is to infuse the treasure hunt into these destination categories by being the first to market with new items and brands and introducing new brands and flavor profiles. We will showcase this innovation in more prominent merchandising locations and drive awareness and demos that allow for product trial. The second area of focus for innovation and newness will be in general merchandise. As I just shared, introducing new brands to our portfolio and finding exciting new items for seasonal and home housewares and consumer electronics will be a key focus.

We know that our members really appreciate and value national brands, and we will continue to offer a broader range of national brands than our competitors. That said, our own brands play an important role in delivering value to our members by offering national brand quality at even better prices. Additionally, these brands drive member engagement and loyalty through a differentiated offering while also driving increased profitability for BJ’s. We are investing in our own brands because we know that members who engage more deeply with our brands are more valuable to BJ’s with annual spend and trips 3x that of lesser engaged members and sustain their memberships an average of five years longer. Our current own brand penetration is 24%, and we have plans to grow it to 30%.

To achieve this, we are investing in the business by recruiting amazing talent and enhancing our brand management and quality capabilities. As you know, Amanda Irish, our SVP of Own Brands, joined BJ’s about a year ago with a wealth of experience in own brand development. She is in the room here as well. This past year, we launched more than 120 new own brand items, including our recent launch of the Berkley Jensen Ultra paper towel. The quality of this paper towel rivals the leading national brand but offers more than $10 of savings. Among the key objectives of this launch was to expand member participation in the paper category. This new product has, combined with other tactics, since launch to deliver nearly 100,000 new members per month into this new — into the category who are now buying paper and who were not previously engaged in that before.

Obviously, not a sustainable rate, but we have really gotten the attention of our members, and they are engaging in the paper category now. Moreover, its introduction to the paper category contributed to the paper own brand penetration growth of more than 200 basis points for last year. And just last month, own brand dollar penetration was up over 700 basis points with unit penetration up nearly 900 basis points. And the icing on top, with the launch of the Ultra brand paper towel, our own brand margin rate growth in paper year-over-year accelerated by 90 basis points. And for the paper towel category, specifically, our margin rate is nearly double that of the national brand portfolio in this category. As a reminder, our margin rate delta varies greatly by category.

So that’s not applicable everywhere. This fall, we also launched a lineup of 10 Wellsley Farms frozen chicken items like popcorn chicken and breaded chicken strips. Our members have loved the quality and the value of this product and own brand penetration was more than 25% in the first quarter of launch, exceeding average industry rate penetration for the category. The addition of the Wellsley Farms breaded chicken products also contributed to category margin expansion of 60 basis points just in the first quarter of launch. As you’ve heard, we are focused on exceeding our members’ expectations, and we will do so by enhancing the parts of BJ’s that they already love while we are — as we are doing in food and refreshing the areas that will inspire them like we will in general merchandise.

And as I mentioned previously, our merchandising strategy is focused on our members and our promotional strategy will align to this objective as well. Throughout this past year, we have been even more intentional in the allocation of our high-value space. Focusing on exceptional value and seasonally relevant themes. This focus has helped us increase productivity per — productivity by 15% on average for each of those sets in our high-value space this year. The approach was brought to life during our annual Thanksgiving promotion. In past years, we partnered with our suppliers to create an offer that when redeemed would result in giving our members a free turkey. The event was largely vendor-centric and relied on the supplier who was willing to offer a free turkey in exchange for a promotion of their products.

And as a result, our members were stocking up on products that really wasn’t relevant to the Thanksgiving meal and we were losing this very, very important food shopping trip. Despite the free turkey, the promotion had historically low engagement from our members, leading to losses in market share during Thanksgiving. This year, we’d set out to win the Thanksgiving shop, and we shifted from one that was vendor-centric to one that was member-centric. We built a strategy that would showcase seasonally relevant merchandise in high-value space, outstanding promotions for — and compelling price points and an opportunity to earn our members’ Thanksgiving shops during the biggest food shopping season of the year. We merchandised the floor pad with Thanksgiving meal and hosting product, partnered with our suppliers to offer great values and importantly, structured a promotion that connected this shop to the Free Turkey reward in a separate trip.

Our analytics team that Paul mentioned earlier helped us identify the most relevant offer and our marketing and digital teams helped us communicate this offer in a compelling way to our members. Members who had spent $150 during the first two weeks of November, received a balance back to redeem a free turkey in the subsequent two weeks prior to the Thanksgiving holiday. The execution was nearly flawless and our members loved it. We engaged 10x more members than we were engaged in prior year turkey promotions, generated 5x more incremental sales by driving an additional trip and growing our member baskets and grew market share by more than 30 basis points, winning the stock-up trip and the fresh trip. I will end where I began. I set out to join a growth-minded company with a strong history of performance and an amazing culture and BJ’s has lived up to that aspiration.

And in merchandising, we will build on the momentum to engage and inspire our members and deliver industry-leading results. I am incredibly proud of what this team has accomplished this past year. And in many ways, we are just getting started. I would now like to introduce our talented Chief Digital Officer, Monica Schwartz, who will share more about our digital transformation. Thank you.

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Q&A Session

Monica Schwartz: Thank you, Rachel. Good morning. Hello, I’m Monica Schwartz, BJ’s Chief Digital Officer. I’m here to tell you about the role of digital at BJ’s and how digital is a key enabler of our past and future growth. Paul told you earlier about our member-centric approach, Tim spoke about our value proposition and personalization as critical to membership renewal and Rachel just outlined our merchandising strategy. We are bringing all of these elements together on our digital properties, along with providing the conveniences shoppers expect. As a club retailer, BJ’s wins on value. With our structurally advantage model, we offer up to 25% off grocery plus promotions. This is our sustainable competitive advantage and the key to our future success.

However, as you know, new consumer habits spurred by the pandemic are putting an increasing premium on convenience and speed. Shoppers prefer to consolidate their shops across retailers, they want to save time on their shopping trip without having to compromise on value assortment or quality or they may even prefer to skip the shop altogether, opting for delivery. Historically, the club channel has been high on value but low in convenience. Think large warehouses to navigate, large pack sizes, no shopping bags. We clearly see the potential to change all that through digital. So as we look out to the next five years, our key opportunity to win with members is by complementing our value with industry-leading convenience through digital and operational excellence.

We believe that with the convenience we plan — we offer today, plus the investments we plan to make, it will be a no-brainer for shoppers to favor BJ’s over traditional grocers. So how are we delivering this convenience to our members? First, we offer a range of digitally enabled fulfillment options that serve members where they are, from free curb side pick up to same day delivery, we offer several options in terms of service level and cost for members. Second, digital plays a role enhancing the member experience in the club. As they shop the aisles, members can scan barcodes, check the price of an item or clip coupons. My favorite app feature is the deli preorder. I can preorder my items from our full-service deli for a quick and easy pickup, no lines, no waiting.

Third, our digital properties enable us to deliver personalized value, thanks to our member data. You have seen some of this with our targeted promotions and saving dashboard. One important development to further leverage our member data has been the launch of our retail Media Edge program, allowing our vendors to target their customers with contextually relevant messaging, seasonal branding, search results and targeted promotions. So why do we strive to engage and serve our members digitally? Quite simply because digitally engaged members are extremely valuable to our business. These members spend, on average, 74% more than club only members. They are more reactive to our promotions and they are more loyal with a three-point higher renewal rate.

Additionally, they tend to skew younger, join higher-tier memberships and some take advantage of our Same-day Select program. BJ’s value proposition, along with our digital conveniences, has driven increased connection and loyalty to our brand. Subsequently, our digital shoppers have grown to almost 20% of our overall shopper base. We must continue to capitalize on this opportunity, meeting consumers where and how they want to shop. Therefore, we are focused on driving digital awareness and retention. By expanding our digital capabilities, and optimizing our operations, we will continue to deliver a great experience, retaining and growing our digitally engaged segment. In the last five years, we grew the digital business over 650% due to our constant innovation and relentless focus on member convenience.

As we can see, digitally enabled sales are now more than 9% of BJ’s sales. This includes sales through BOPIC, curbside, same-day delivery and ship to home. While this penetration continues to grow, digital’s impact on sales is far larger. Members are using digital for browsing, discovery, curbside check-in, price scans and more. In addition, members are overwhelmingly clipping coupons on our app to redeem in club. Currently, 70% of all clip coupons are digital, supporting an additional $3.7 billion in merch sales. Simply said, our digital assets facilitate over 1/3 of all BJ’s merch sales. More importantly, over 55% of all members that engage with BJ’s last month used digital. The scale and growth of our digital influence is significant because it gives us increasing opportunities to deliver more conveniences, further improving the value proposition of our membership.

For example, with push notifications, we can speak to members with targeted messages that impact shopping behavior. So how did we get to where we are today? We began our digital transformation by innovating across technology, merchandising, marketing and operations. Our objective was to build a profitable digital business that could leverage our structural advantage to provide the conveniences our members wanted at scale. Prior to the pandemic, our investment had been foundational, building our commerce engine. The onset of the COVID pandemic caught us at a favorable moment in our digital development. Our foundational work and our focus on member convenience allowed us to roll out several critically relevant innovations. We quickly launched curbside pickup, followed by BOPIC Fresh, expanded our delivery programs and built robust tools to support online shopping.

Today, we continue to innovate, iterate and perfect our service offerings while optimizing costs. Let me bring this to life with a real-world example. Same-day delivery is the embodiment of a club’s value with the highest level of convenience. You can get a full basket of goods delivered to your doorstep in two hours, cheaper than a grocery store. We have pursued a very clear strategy to build our same-day delivery program. First, we offered same-day delivery on Instacart’s marketplace. Next, we enabled a white label site powered by Instacart, then during the pandemic, we’ve built out the same-day capability on our site and app. This powered a convenient, full-service model for same day to all of our members. However, there were still some risks and limitations with this model, including costs, delivery zones and ownership of the end-to-end member experience.

Further promoting this convenience to our members, we launched same-day Select, a special membership add-on. Members can get unlimited same-day delivery for an annual $100 fee or 12 deliveries for $55. This program offers incredible value to members, encouraging repeat deliveries and fostering the formation of new shopping habits. Next, to further drive the scale and profitability of same day, we chose to disaggregate our grocery pick service from delivery. We expanded from a full-service model with Instacart to a last mile delivery model. This meant that the BJ’s team members would pick each order, handing them to the last mile partner at the club entrance. By leveraging our club labor, each order results in a more accurate, higher quality fresh pick while also offering substitutions to our members.

This reduces cancellations, maximizing sale and improving member satisfaction. Our business now supported last mile delivery with DoorDash and a full-service model with Instacart. We also offer BJ’s assortment on the Instacart and DoorDash marketplaces to extend the same-day delivery to more customers. With the low overlap between customer bases, the marketplaces drive incremental sales, brand awareness and, most importantly, member acquisition. Finally, we expanded to multiple last mile delivery partners. In addition to Instacart and DoorDash, we recently added Roadie. By working with three delivery partners, we can route each order across geographies to the vendor that offers the best price and delivery performance for that market. This new model extends our delivery coverage area while reducing our costs and risks.

Soon, we will be able to expand our service to even more merchant categories. Roadie is enabling us to provide same-day delivery for bulk orders and larger items such as televisions and patio sets. Another example of how we deliver convenience is our app. Our members love our app and give it a high score relative to our competitors. We believe that on a scale adjusted basis, more of our members use our app than either of our club competitors. With over 3 million monthly active users, it represents a large percentage of our members’ digital behavior. Our app drives over 60% of traffic and over 50% of digital sales. As we have released new features on the app, our engagement has increased across our club and digital shoppers. And over the past three years, our app conversion rate has increased over 350%.

A highly engaged member base using our app is a clear competitive advantage as it allows us to market more directly, enables in-club digital conveniences and supports online shopping. We will continue to win by elevating member conveniences and focusing on commercializing this business. Our enhanced merchandising will help drive basket size and conversion. Easy navigation, improved search, bundling and filtering will allow members to shop however they want, by lifestyle, by diet, with buy it again list or by fulfillment method. And as we minimize friction from the end-to-end experience, from shopping through delivery and the returns process, we will acquire new members through digital, increase their spend and retain them. We will continue to expand our in-club digital conveniences to assist Club shoppers, helping them save time, find products, recipes, promotions and most importantly, skip lines.

All this leads to a better experience with the BJ’s brand driving loyalty. Finally, we will continue to invest in developing personalized content and experiences. As part of this, we’ll be focused on scaling and growing Media Edge, enabling our vendors to leverage our first-party data to connect with our members at the right moment in their shopping journey, further increasing digital sales. To wrap up, innovation and operational focus have driven our past success. Our digital transformation powered a profitable $1.4 billion business, along with digital services that influence over 34% of BJ’s merch sales, supporting our highly engaged digital members. We will further invest in our digital capabilities for an easier and more enjoyable omnichannel experience.

We will continue to unlock value for our members driving the next stage of our growth. Now, I would like to introduce Bill Werner, our EVP of Strategy and Development, who is going to share our success growing the BJ’s Club footprint and my personal favorite shopper, #1 same-day delivery shopper.