Does Costco save you money?
Think about your last visit to a Costco or Sam's Club, their brightly-lit stockrooms with aisles wide enough for a small flatbed, near the variety of a Middle Eastern bazaar without the haggling, and enough free samples to cover lunch on a Saturday.
The charms of the warehouse experience tempt even the most ardent 'local first' consumers. But the question vexing cost-conscious shoppers remains, are you saving money?
For the uninitiated, warehouse companies embrace a "stack 'em deep and sell 'em cheap" philosophy and they charge an annual fee for the privilege of shopping at their outlets.
At Costco, a basic "Gold Star" membership costs $55. You pay $110 a year for an upgraded "Executive Membership," which offers 2 percent back on Costco purchases, extra travel benefits and the like. At Sam's Club, which Walmart owns and operates, the basic "Sam's Savings" card costs $45 a year. The upgrade to a "Sam's Plus" account costs $100 and offers earlier shopping hours, and pharmacy and optical department discounts among other perks.
The answer to whether it pays to shop at these stores is yes ... sometimes, according to three frugality experts.
Blogger Jordan Page, the Fun Cheap or Free Queen (funcheaporfree.com), loves Costco. In fact, the Draper mother of three shops there twice a month. She limits her shopping to the Seattle-based chain and Walmart, where she price matches pretty much everything she doesn't buy at Costco.
But she rarely buys groceries at warehouse stores.
"You stand in line at the register and you see all the triple digits on all the machines," Page said. "I started learning that many things at Costco actually weren't a better deal."
North Salt Lake resident Jessica Williams, aka the Utah Deal Diva, agrees. With four kids and number five due in October, Williams has a "love-hate relationship" with Costco.
"I don't go to Costco because I'm being frugal," she said. "With a large and growing family, there are times when I need to buy quickly in bulk."
Grocery Guru Ken Roesbery says he shops at Costco cautiously and selectively, sticking to office supplies, camping gear and specialty Kirkland (in-house brand) chocolates.
"The Costco memberships are worth it," he said, "but when it comes to groceries, they are way, way overpriced."
To verify that claim, I went shopping for some of the staples of a barbecue for six (it's Memorial Day weekend, after all). I bought goods at Costco, Sam's Club, Smith's and Harmon's on Wednesday and I admit, I went sans coupons.
According to my survey, Smith's and Harmon's are significantly cheaper than the warehouse stores. But by shopping at Costco, you end up with a dozen extra hamburger buns, more chips, roughly two extra cans of baked beans (when you total the ounces), roughly a couple of bottles of ketchup, twice as much Coke and 12 extra bottles of beer, with similar results at Sam's Club. If you look at the cost per ounce, say, for example, chips, Costco is actually the cheapest at 17 cents per ounce while Sam's Club, Smith's and Harmon's are all 21 cents per ounce.
But again, this total is completely hypothetical because at Costco and Sam's Club, you have to buy in bulk.
With all this in mind, here are a few tips from our experts on how to save money when shopping warehouse-style:
Buy what you'll use • Williams says buying in bulk may not be the cheapest option for, say, a young couple with just a toddler to feed. And before you purchase that 40-ounce bottle of marinade, make sure you really like the product. "If you're throwing out more than a quarter of it, it's not a good deal," Williams said. She adds that warehouse clubs are a great resource when feeding a crowd, but you will trade value for convenience. "I once made my own veggie tray and it was so much cheaper to put it together myself."
Stay away from groceries • Roesbery says planning menus based on what's on sale at your local supermarket is a much more frugal option. That habit alone, he says, can save consumers 40 percent on their groceries and 70 percent if they use manufacturers' coupons in the newspaper (Disclosure: Roesbery works for MediaOne of Utah, which sells advertising, prints and distributes The Salt Lake Tribune and Deseret News).
Price check before you go • Page started taking notes when shopping at Costco, which led to a TV interview, which landed her a private, behind-the-curtain tour with a Costco manager. She learned that if there's an asterisk on a price, it's a low-inventory item priced to sell. Prices ending in 97 cents also show what's been marked down. She adds that if you can wait for a case-lot sale at your local grocer, do. "As a rule, the small canned food at Costco is not the best deal you will find," she said.
Our experts were mixed on whether to go with the upgraded membership as opposed to the basic. Page swears that the Costco Executive is well worth the investment. Because she shops so much at Costco, she gets rebates from both Costco and American Express (the only credit card Costco accepts). But Roesbery thinks you're better off with a basic membership (unless you shop exclusively at Costco) and shopping with coupons and rewards cards at grocery stores instead.
Bottom line, though: Our three experts say buying a club membership pays off.
One final note: Most of the references are to Costco because the three experts consulted don't currently shop at Sam's Club. Two of them Williams and Page have shopped there before and each says they prefer Costco.
"If Sam's Club is right for you because it's closer, that's great. A lot of food and products they carry are nearly identical [to Costco]," Page said.