How Much Will You Save on Groceries by Joining a Warehouse Club?
Last updated in September 2018
For some food shopping, membership warehouse clubs offer low-cost alternatives to supermarkets. We surveyed BJ’s and Costco. These warehouse stores carried few if any of the items in our market basket in the usual sizes, but when we looked for the same brands regardless of size, warehouse stores—which specialize in bulk sales—stocked a larger portion of our market basket items. BJ’s had 72 percent and Costco 44 percent.
The figure below indicates how much warehouse stores could save you. Since the warehouse stores stocked so few items in the sizes of our basic market basket, we looked for items of any size, so long as they were the same brands. We then used unit prices (for example, price per pound) to calculate the warehouse stores’ prices for amounts specified in the market basket. After this adjustment, we compared the prices of items at the warehouse stores with prices for the same brands at several other stores. Bear in mind that this is not an “apples-to-apples” comparison—the sizes of the items priced at the warehouse stores were usually larger than the sizes of the items priced at the other stores—so the warehouse stores enjoy an advantage in such a comparison.
The two warehouse clubs both offer significant savings for most shoppers. Costco, for example, beat Shaw’s prices by a whopping 36 percent, and BJ’s beat it by 31 percent. And compared to Stop & Shop, the savings were about 33 percent at Costco and 28 percent at BJ’s. While BJ’s offers significant savings compared to even the lowest-priced local grocery store options, shopping at BJ’s won’t net you savings compared to what you’d pay at PriceRite, and saved us only eight percent off Market Basket’s and Walmart’s prices.
In addition to having low prices, Costco received high customer ratings for the quality of its meat and above-average scores for produce quality and overall quality. (BJ’s ratings were considerably lower than Costco’s.)
While the warehouse clubs typically offered significant savings compared to prices offered at grocery stores, these savings perhaps aren’t enough to justify paying the clubs’ annual membership fees if you don’t use them often. And if half of what you buy is wasted due to spoilage, you won’t save by buying in bulk.