Warehouse club stores are a prime example of the belief that buying in bulk saves money, or paying less per unit despite for a larger parcel means spending less overall. It sometimes is true, but not always, so consumers should comparison shop to find the best deal.
Buying in bulk
The theory goes that if a person buys in bulk, they will save money. In other words, paying less per pound or ounce saves money, even if that means buying more of it from a bulk retailer. Well, unless it spoils. Naturally, this led to the development of warehouse club stores, retail giants such as Sam’s Club, BJ’s and Costco. By 2009, according to the Wall Street Journal, such chains were exceeding $113 billion in annual sales, so there must be something to it.
In many cases, a consumer can save money at warehouse club stores though not always, which is why some comparison shopping, as always, should be done.
Check before buying
According to MSNBC, a recent warehouse comparison by Hip2Save.com found some products were found at typical retailers like grocery and drugstores at better prices than at warehouse clubs and vice-versa. Butter, maple syrup and fresh produce were as well. However, diapers were cheaper at grocery and drugstores, as were salad dressings and other condiments. So were breakfast cereals.
Cooked rotisserie chickens were cheaper at warehouses and were also larger. Rotisserie chickens are big business, too; Costco according to ABC, sold 26 million of them in 2004.
A 2009 comparison by SmartMoney.com found similar disparities comparing an average from a sampling of grocery store prices with that of BJ’s, Sam’s Club and Costco. For instance, the grocery store average for 10 pounds of chicken breasts was $29.90, as was Costco’s, but BJ’s priced the flesh of said fowl at $22.29 and Sam’s Club had it down to $19.70, a 34 percent discount. Grocery stores averaged $3.29 per gallon for skim milk, compared to $2.29 from Costco, $2.09 at BJ’s and $1.88 at Sam’s Club.
However, six red bell peppers went for $2.97 at normal, non-club retail stores though it was a sale price. Costco charged $6.99 for the pack of peppers, BJ’s $5.99 and Sam’s Club was asking $5.88. An 18-egg carton was $2.79 among normal grocers, but BJ’s charged $2.99 and Sam’s Club charged $2.93. Costco’s discount, however, was no yolk at $1.50.
Price of admission
Each of these stores, Costco, BJ’s and Sam’s Club, all require a membership to shop there. The membership can make savings from shopping there a little more difficult for some. Sam’s Club has a basic membership fee of $40 per year, Costco’s is $55 and BJ’s is $50, according to ABC, which are raised periodically, usually every few years, in line with inflation.
If a person doesn’t firstly save enough while shopping there and secondly do so often enough to cover the membership, it’s better to not get a membership.
Wall Street Journal: http://online.wsj.com/article/SB10001424052748704026204575267093678271732.html