Warehouse Clubs Are Worth the Annual Fee

Here's a post where the author compares the prices of items at Sam's Club to the prices at local grocery stores and comes up with the following conclusion:

Most of the time, I was able to compare items of the same container size. In other words, if a package of four 32-ounce bottles of Mott's Apple Juice could be purchased at Sam's, I priced the same Mott's Apple Juice, but in a single 32-ounce bottle from the two grocery stores. When this was not possible, I wrote down the price of a comparable size. After crunching the numbers, I found that a great majority of the items were indeed cheaper at Sam's. On average, the savings amounted to 31%, more than enough to easily offset the $35-45 annual membership fee.

Even better, if you buy in certain categories you can save even more:

To see if there were patterns to where the savings would be found, I broke down the data into categories: baby, can goods, cereal/bread, cooking/baking, dairy, frozen, health/hygiene, household (cleansers, paper and plastic products, etc.), snacks, soup/sauce, and other (peanut butter, stuffing, salad dressing, etc.). The big winners: cereal/bread, cooking/baking, snacks, and other averaged nearly 40% savings. Still not impressed? Buy some raisins, syrup, bottled water, and sandwich bags and you can save an average of 66%.

And if you buy the store brand you can save a bundle:

And it doesn't stop there. You can rack up even more savings by buying generics in bulk, where I found savings of up to 83% on items like aspirin and hand sanitizer.

A few thoughts from me on this:

1. Obviously you have to USE the items and make sure they don't go to waste. Otherwise your savings gets eaten up quickly.

2.  Buying in bulk is often a money saver, but not always.

3. I'm assuming the same conclusions about Sam's above will apply to Costco.

4. Let's say you spend $500 per month on groceries. That's $6k per year. If you "only" save 20% of this, that's $1,200 per year. Not a bad deal for a $35-$45 membership fee, huh?

5. For me, the decision is even easier -- my employer provides a free Costco membership for me. :-)

Comments

[Kevin]

Same for me, my employer pays for our Sam's membership. We haven't really shopped their much yet, but already have plans to buy some supplies for a couple parties coming up this summer.

[Debra]

As a long time Sam's Club member, I find great savings on their meats. I love lamb chops, and what I would pay $11.00 per pound in the gorcery for, I can get at Sam's for $6.87 per pound. Also, I buy their pork loins and cut and bag my own pork chops. Their bulk burger is easy to repackage into smaller portions. The bread I like is $2.59 per loaf in the store and two loaves for $3.00 at Sam's. So I freeze one. I can go to Sam's and spend about $300.00 for meat and have enough for 4-6 months. Pretty good return on my $35.00 membership.

[Thomas]

Sams and costco are similar except that Costco pays a decent wage to rank and file and a reasonable wage( not exorbitant) to top management. Costco donates to the Democratic party and Sams to the Republican party.

[Finally Frugal]

While I don't shop at membership-only warehouse stores (too much food for little 'ole me), I did just decide to try buying more food in the bulk section. I compared prices (see my blog for a detailed view) and learned that with one exception, purchasing in bulk was less expensive than even the store brands!

As prices rise (and my salary doesn't!) I'm looking for more and better ways to save money at the grocery store. Thanks for this post!

[Sam]

Good point Thomas! Looks like I'll be doing all my bulk shopping at Sams.

[Chief Family Officer]

The thing about buying in bulk, though, is that the unit price can be higher compared to loss leader prices at the supermarket. For instance, that 32-ounce bottle of juice may be more expensive at the market at regular price. But if it's on sale and you have a coupon, the unit price may well be cheaper than the warehouse (especially if your market doubles coupons). Or a different size might be on sale and cheaper per ounce (especially with a doubled coupon).

Sure, you're probably only going to buy one or two bottles of juice on sale with coupons, but do you really need four bottles, especially all at once? Can you wait until the next sale at the supermarket? It's just one more consideration to factor in before you rush off to Costco or Sam's.

[Clever Dude]

We signed up with Sam's even though it's just the two of us because their milk (at the time) saved up to $1 per gallon. We go through a gallon per week (mostly me) which paid back the $40 membership plus most gas costs to get there.

But then the milk prices rose and Sam's was on par with the local Safeway so we let the membership expire last October. But we went back for a special event recently and found their milk is now $0.80 cheaper than Safeway. Since we split with our neighbor, we'll save $22 per year over the fee when we renew.

[Working Rachel]

When I've priced warehouse stores, they haven't been worth the membership fee for me. The brand names are cheaper than brand names at a regular grocery store, but rarely beat the store brand price. For basic items like cereal or condiments, I just don't see the point in paying extra for brand names. I do buy some brand names, mostly for more unusual foods like 80% dark chocolate or sugar free ketchup, but warehouse clubs don't usually carry those things, so there's no cost savings there, either.

The one thing I've been really impressed by at warehouse clubs is that they sell bulk yeast for something like $5.00 per half pound--I can't find that anywhere else and it's a HUGE savings over those little packets.

[Calvin Trager]

The membership fee doesn't seem to keep members from renewing year after year, obviously there is a value derived as a member. The monthly Costco coupon mailers are full of additional savings.

When I was considering the different warehouse clubs I noticed a difference in what bulk means.

Costco seems to have a more manageable bulk quantity, meaning the bulk at Costco was a smaller quantity (and most times a better quality) than compared to Sam's or BJ's.
The store brand Kirkland is great quality and a tremendous value.

Sam's and BJ's had much much larger quantity bulk packaging.

This important for singles (like me) or couples who don't want to buy a bulk product that is too much to use in a reasonable amount of time.

[F. D. Bryant III]

I have memberships at BJ's and Costco. Costco consistently has the lowest prices if I can find the item there (coupons and sales not withstanding). I don't even check anymore (although I probably should, there ought to be an easy way to do that). BJ's is typically cheaper than supermarkets (although you can sometimes get lower prices on Wal-mart generics). When I factor in the coupons and cash rebates through the executive membership and cash back credit card - the memberships are well worth it.

You can reduce the cost of your membership fee 8% for every month you can go between shopping trips. Say your membership is up Dec 31. You can stock up on Dec 30 for the next 3 months. Then you can renew in March and it won't be up until the following March. You essentially got 3 months free.