The Best and Worst Buys at Warehouse Club Stores

Smart Money lists the best and worst items to buy at warehouse club stores as follows:

Best Buys

• Alcohol
• Milk, butter and eggs
• Electronics
• Meat
• Prescription medications

Worst Buys

• Designer clothing
• Items that won't get fully used
• Frozen food
• Paper goods
• Gasoline

I'm a frequent Costco shopper and I also compare their prices with other alternatives on a regular basis, so I think I'm fairly informed on the pros and cons of warehouse clubs. Here are my general recommendations/thoughts:

1. If you have a price book (or a great memory), you can accurately compare the cost per whatever (ounce, pound, etc.) between a warehouse club and any other place you can get an item. We'll be in Costco and I'll ask what my wife usually spends on item X. She'll give me a price and an amount (like "for 16 oz.") and I'll do the calculations on my calculator. Then we can really determine the better price.

2. I have NEVER seen Costco have higher priced gas than neighboring station. They're always 5 to 15 cents cheaper per gallon in our city.

3. Do warehouse clubs really have designer clothing? I never see it.

4. I'll need to do a toilet paper comparison. I always thought the Kirkland brand was a great deal, but maybe it's not.

5. Of course, if you buy something because it's cheaper and then you don't use all of it because it contains so much, you have actually cost yourself money. One solution to handle bigger quantities (like OTC medicine where you get a bazillion pills in their smallest package) -- find a friend or relative who will split the cost and item with you.

6. Samples, samples, samples. LOVE these! It allows us to try new and interesting foods that we would never try otherwise, so I consider this a big benefit of warehouse clubs.

7. Photos. Costco has a simple site where you can upload your photos and pick them up the same day at a local store. And of course they have the famous custom calendar as well.

8. Other things I think are good buys at Costco: 1.) Prepared food (at their restaurant.) There are limited choices, but for what they have the prices are decent. 2. Tires. I bought my tires there and so have several of my friends. One recent co-worked saved a few hundred dollars when I suggested he look at a warehouse club to buy tires.

Comments

[Mark]

I can comment on gas. I live in one part of CT, and work 25 miles away. Gas at a BJ's near work is usually penny for penny the same price as it is where my home is. At my previous job, which was 15 miles closer, that BJ's was sometimes a little cheaper.

You may be able to get a deal on toilet paper at the warehouse clubs, but only on the generic brand, so then you have to factor in the quality.

Deli meats were usually a better deal at the warehouse club as I've found them to be a dollar or more per pound cheaper.

For regular meats/poultry, I've sometimes seen better deals on sale at the grocery store. Ever since my mother told me she's never paid more than $1.99 for a pound of boneless/skinless chicken breast that's been my benchmark. I've never seen it that low in the warehouse clubs.

Fruits/Vegetables at first glance appear to be cheaper at the warehouse clubs from what I can tell. You can get a 5/lb bag of bananas for $1.99 usually.

Bread is probably cheaper at the supermarkets. I can get the generic supermarket brand bread for $1.49 / $1.99. The cheapest I see brand-name bread (they don't have a generic for comparison) is $2.50.

[Mark]

A couple more comments I forgot to mention earlier:

Cereal - this is usually always cheaper at the warehouse store, ounce for ounce.

Granola Bars - The brand name granola bars in bulk beats out the generic at the supermarket bar for bar in price (and taste!).

Bottled Water - Yes I'm not being environmentally friendly here, I know...bottled water I have found to be cheaper always at the warehouse stores, even if the supermarkets run sales.

If anyone has PocketPC smartphones, there's a really neat and free application called HandyShopper. I believe they make it for PalmPilots as well. It's not super user friendly, but it is a good tool to do comparison shopping. It even lets you make shopping lists, categorize, etc.

The part I found really useful was you put in the item names, and then their price and unit quantity, whether it be actual quantity, ounces, bars, etc. This lets you do an apples to apples comparison when trying to see who has the cheaper price per unit. That way you don't have to memorize the prices/quantities/units of everything, you can just plug it into the application.

Lastly, don't forget you can use coupons at the warehouse clubs, and not just the ones they send you in the mail, but regular paper coupons from the Sunday paper as well. You might be able to know another 50 cents off that 37oz box of Cheerios.

It all comes down to knowing how much items cost per unit of measure to get your true cost...sometimes the warehouse wins out, sometimes the supermarket wins.

[Chris]

I live in CT and fill up my car weekly at the Wallingford Bj's. I can say the gas prices are fairly lower than any other gas station in town. In CT, gas stations can sell gas for a cheaper price if customers pay cash. The prices at Bj's fall in line with the discounted cash price but you can pay with debit or credit. Paying with a card is faster and more convenient for me, especially with cash rewards. Stop and Shop gas gives a good deal if you use their frequent shopper card but you usually have to wait in long lines. You can, however, save more money. For every $50 spent at S+S you receive 10 cents off a gallon.

[SAHM]

I love Costco, but I have also learned there are things it is better to watch the local grocery stores for sales and use my coupons. Costco only allows their coupons to be used. You cannot use the manufactures coupons.

Gas- I don't think I've ever seen it higher than anywhere else. Of course driving out of my way to Costco to get gas would NOT be cost effective

Meat- The lean ground beef, whole chickens and occasionally some higher end cuts of meat are cheaper. I use the same rule as Mark's mom- no more than $1.99/lb for boneless,skinless chicken breasts.

Cereal- If I buy on sale and with a coupon, I can get it much cheaper at the grocery store than at Costco. Now, regular price, it is a better deal at Costco.

Milk- Can't beat the price at Aldi. Before Aldi started pricing their milk incredibly cheap, we'd always buy our milk from Costco because it was about a dollar cheaper per gallon. That adds up when you use 4-5 gallons a week!

Overall, you need to be careful at any warehouse club. It is so easy to get wrapped up in the "savings" when there aren't always savings. I did a price comparison a couple of years ago to find out if I was indeed using my grocery budget the best. I made some changes and stopped buying some things at Costco and watched for the sales at the grocery stores.

[Mark]

Chris - You're right about the Wallingford BJ's and Stop and Shop. That's the one that's 15 miles closer for me than the North Haven one...but the lines at the Wallingford S&S are really long. The Gulf near my condo is 10 cents cheaper if you pay with cash but it's still usually the same price as BJ's.

I usually don't carry much cash on me so I'll usually get gas at the Wallingford BJ's when it's convenient.

[Nicholas Paldino]

I go to the BJ's in College Point, Queens, and I can say that the prices on milk, butter, and eggs is definitely better.

I never see the cost in alcohol as being too different from the corner store or the smaller supermarkets around me. I buy a good deal of craft beer anyways, so I'm not generally interested in the major brands they sell here (if I am, I don't have qualms going around to the corner store).

The meat is DEFINITELY cheaper in these stores. The butchering is NOT that good, but one can always clean it up more when they go home. Their short ribs are quite good.

[Mark]

As a single guy, I saw no benefit at Sam's Club, being that it was more than 10 miles from my home. I still have the no-fee cash-back Discover Card, but not the membership.

Meat was a good buy, although the steaks tasted like water. I could get better buys at supermarkets when they ran occaisional sales. I don't eat much meat these days anyway.

Gas was NEVER cheaper than Sheetz !

Milk was the best deal. Butter the same as supermarket sale prices. Paper goods and household items were best buys if Member's Mark. The one thing that drove me crazy was that Sam's sold every Heinz product except Heinz 57, and caffeine-free Luzianne tea bags, but no regular tea bags!

Best deal by far was the bags of lemons and limes! I make a lot of margaritas and cocktails, and the supermarket typically prices lemons at a $1 apiece.

[JeffrO]

My kids are teenagers now, but when I had 3 in various stages of diapers, the cost of a Costco membership fee was recouped ten-fold in the annual savings from Costco brand diapers, wipes, baby formula, etc. Ten years later, I now re-coup the member fee in gas savings alone. (the warehouse is conveniently near our place of worship). In my market, Costco is ALWAYS cheaper...varies 2-10 cents less per gallon, depending on the independents' price swings.

And what about the savings on coffee (love the coffee selection), pet food (2 cats + 1 dog), and eyewear.... Oh, don't get me started on the eyewear industry -- the mark-ups are criminal.

My $100 Executive Member Fee usually kicksback a $70-$85 rebate check each year.

I agree, you do have to watch the cost per unit and control impulse buying. But if you have a plan and know how the warehouse fits in that plan....it's a great value for families.

[SAHM]

JeffrO, I had forgotten about the wonderful 2% cash back every year. Our check has covered our Executive Membership the last couple of years. And the diapers- I saved a TON on them. I would buy them for my friends. I had to put limits on how many I would get at one time because it took up valuable space in my car.

I agree 100% with your statement about it being a great value IF you have a plan.

[Cheap Like Me]

I think that list is kind of strange. I agree that Costco's gas is cheaper in our area, and I buy it using my (cash back) Executive Membership and pay for it with my (cash back) Amex Blue Cash card.

I also know (based on price booking) Costco is cheaper for:

- Yeast - This is the all-time best deal. Last time I bought a bag, it was 10.6 cents per ounce compared to $1.72 per ounce at the grocery store!
- Flour - we buy 25-pound bags and store them in our chest freezer (no moisture/bugs) until we use them.
- Frozen food ... I don't know. It's the same for bags of potstickers; less for organic green beans, our main frozen purchases at Costco.
- Nuts.
- Luxe snacks like dried fruit, almond butter and Nutella.
- Coffee - Bean coffee is significantly cheaper at Costco than many places, and you can choose organic and fair trade options.
- Premium dog food -- the Kirkland brand is quite good quality.
- Dog beds, etc. -- Kirkland's is about $15-$20; inferior beds are at least $25-$30 at a pet store.
- Cat litter (the savings on cat litter and diapers alone more than paid for our membership when we had a cat and an infant).

As for "designer clothes," I'm not sure what they mean. I do know my husband has bought Ralph Lauren jeans there recently for $20. He wouldn't buy them for $60 elsewhere; but he would spend $20 for lower quality, less attractive jeans elsewhere, so I'd just as soon he chooses the handsomer option, and barring a thrift store, I don't see a lot of jeans much lower than that. We also recently bought him a "three-way" fleece-lined, insulated, zip-out-liner parka for $60 at Costco -- a designer item of which I've seen comparables for up to $250. I think that one's off base. Plus, with lesser choice of items at Costco, you either like it or you don't -- usually the latter -- which can save money.

As well, Costco is a quality business you can feel good about supporting.

Now you can see where our money goes...

[Gino]

I've actually had a lot of good experiences with Costco's pharmacy. Other places I had gone to were slower, not as helpful, and insisted on giving me my prescriptions in smaller "servings" forcing me to return and pick up more, paying another fee. This may not be an issue for most people, but as a diabetic, it really makes things a ton cheaper when I can get a three month supply of medicine and test strips $50 cheaper than Walgreens.

I also believe that most state laws require everybody be allowed access to a pharmacy, not just members. So you can get the better service and deals without having to shell out for a membership.

Video games tend to be $5 - $10 cheaper there as well, so if there is something I want, I always look at Costco first. And filling up on samples for a quick lunch and then finishing with a churro on the way out the door makes for a very economical trip (the Costco is less than 5 miles from the house and I'm a horrible diabetic, I know).

[Mary@SimplyForties]

I recently bought 4 tires at Sam's and saved about $150 over buying them at the local tire store in my town. That was a huge savings. It was so convenient too. I left my car, went into the store to shop and they called me over the store speaker to say it was ready. I checked out, went into the tire part to pay and, when I was ready, there was my car in its original parking space, all ready for me. I will definitely buy my next set of tires at Sam's. I keep my grocery price book, which has unit pricing, in my pda so I can check each item as I shop, which ensures I don't spend too much on anything just because it seems like a good price.

[JeffrO]

One last comment: you gotta love the $1.50 hotdog and drink combo in the food court. As young marrieds in Tualatin, OR my wife and I literally could not rub two nickels together we were so poor, but we would could go to the local Costco parking lot, get a hot dog combo(outside cart in those days) and have our Saturday afternoon lunch date... the value lured us to quickly save enough for our first membership.

[fivecentnickel.com]

"Items that won't get fully used" are a bad deal no matter where you buy them. :)

[Jen]

I got a Costco membership to save on diapers. Diapers alone made up the cost of membership. I have done price-booking, and with rare exception, Costco beats the local grocery store on unit pricing. The Kirkland brand is great too! And Costco gas is always cheaper than any local station. I now have the executive membership and AmEx from Costco. Last year my rebates (minus the membership fee) were in excess of $100. If I can get something I regularly use from Costco, I get it. I don't do a lot of impulse buying, and I still do price comparison, but Costco usually comes out as the best deal.