How Much Will You Save on Groceries by Joining a Warehouse Club?
Last updated September 2018
For some food shopping, membership warehouse clubs offer low-cost alternatives to supermarkets. We surveyed Costco and Sam’s Club. 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. Sam’s Club carried 50 percent and Costco had 36 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. Sam’s Club, for example, beat Cub’s prices by a whopping 34 percent, beat Hy-Vee’s prices by 33 percent, SuperTarget by 25 percent, and Walmart by 19 percent. Costco’s prices were about 10 percent higher than Sam’s Club’s, but nonetheless offered lower prices than all the other chains we surveyed.
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. (Sam’s Club’s ratings were considerably lower than Costco’s.)
While the warehouse clubs 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.