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BJ’s Wholesale Latest to Tighten the Reins on Supply Chain

BJ’s Wholesale Club snapped up four distribution centers and those facilities’ trucking fleets from Burris Logistics in the latest move by a retailer to take greater control of its supply chain.

The acquisition, announced last week, includes refrigerated distribution centers in Connecticut, Florida, Maryland and Kentucky, along with those facilities’ fleets. The purchase price was not disclosed, with the deal expected to close in the second quarter.

The two companies know each other well, with BJ’s having worked with Burris for over 20 years to handle perishables in the logistics firm’s temperature-controlled facilities and trucks.

Bringing that service in-house will help as BJ’s looks to “accelerate our new club growth, broaden our footprint and expand our fresh food offerings,” President and CEO Bob Eddy said in a statement.

The membership warehouse chain, which has an approximate market cap of $7.8 billion, currently counts 225 stores and 156 BJ’s Gas locations in 17 Eastern states.

Eddy told analysts in a November call on the company’s third-quarter results that supply chain and sourcing challenges were expected “for the foreseeable future,” likening the situation to the game “whack-a-mole” and the company was preparing accordingly.

“We are looking for alternate suppliers, while also leveraging owned brands to drive further penetration. We’re partnering with new transportation providers and bringing in products early as vendor lead times have gotten longer,” he told analysts.

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BJ’s purchase is just the latest in a number of moves made by retailers looking to squeeze out greater efficiencies in their supply chains by moving services in-house.

American Eagle Outfitters Inc. paid $360 million for Quiet Logistics in a deal that closed in December. That followed the retailer’s purchase, also last year, of delivery start-up AirTerra, founded by former Nordstrom and Walmart supply chain executive Brent Beabout.

Target’s been plotting to open more distribution centers and in 2020 bought the same-day delivery tech created by Deliv to bolster its existing Shipt offering. Walmart said in late 2020 it bought last-mile delivery company JoyRun. Meanwhile, Amazon scooped up autonomous warehouse robotics company Canvas Technology in 2019.

Technology that can enhance visibility in the logistics process, warehousing automation and artificial intelligence to assist with fulfillment have been favorites among investors. New technologies and where capital is going were points of many conversations had throughout the three-day Manifest conference in Las Vegas this week as executives across the logistics industry converged with tech start-ups to tackle the industry’s challenges.

While money pumped into e-commerce in the past, capital is now being deployed to other facets of digital retailing.

Tracy Black, operating partner at investment firm NewRoad Capital Partners and former senior vice president at J.B. Hunt Transport Services, said in a Manifest panel Wednesday “the growth in e-commerce is driving things around reverse logistics and it’s really bringing to light things around sustainability.”

More large companies are now working with startups, pointed out Chris Stallman, a partner at venture capital firm Fontinalis Partners, on that same panel. He added companies’ “reluctance to change” some six or seven years ago has shifted as more become open-minded toward logistics tech.