Saving Money: Is Joining a Warehouse Club Worth It?
When I teach classes to help people save money on their everyday expenses I get the same question. I’m always (as in every. single. time.) asked: Is a warehouse club membership worth it? Folks are confused. You pay an annual fee of $40- $55 to a retailer like Sam’s Club, Costco or BJ’s. In return you get deep in-store discounts and other benefits. Do those discounts and benefits justify the cost? Probably not.
I can only think of one type of person who, without hesitation, would benefit from a warehouse club membership. If this is you, then you’re in luck:
- You only shop once or twice per month including all last-minute runs to the grocery store.
- If you didn’t shop at a warehouse club, then you’d definitely shop at a local supermarket. There’s no way you’d buy your groceries at a big box retailer like Target or Wal-Mart or a hard discounter like Aldi or Tarder Joe’s.
- You don’t want to ever pay attention to the price of items you put in your cart. You don’t want to ever read a sales flyer.
- You are not overly brand loyal. Warehouse clubs have a fairly limited selection and you may not find your favorite brand in their aisles.
For the rest of us it makes more sense to buy the bulk of our groceries at places like Target, Wal-Mart, Aldi or Trader Joe’s and then supplement with the best sale-priced items from an area supermarket. Here’s why:
- Big box stores and hard discounters are competitively priced with warehouse clubs. Most people calculate the amount they save at a warehouse club compared to an area supermarket. Supermarkets are notoriously expensive. Making another retailer your primary go-to store will save you bundle without an annual fee. (Truth be told, I can think of a few things I buy that cost more at warehouse club than at my local Aldi. Not kidding.)
- Sale prices at a supermarket can match or beat warehouse club prices. For years we had a Sam’s Club membership that my husband wouldn’t relinquish. He acquiesced the day we walked through the store and I quoted the sale price for item after item on the shelf. Finally he believed me that buying sale priced items in bulk from the supermarket made more sense than the annual fee.
What about the gasoline discount and other benefits? Are they worth it? Again, maybe.
Yes, warehouse clubs do offer lower-priced gasoline. But how much cheaper? GasBuddy.com can help us figure it out. I use their website and their free app to find the lowest gas prices in my zip code. Costco is the cheapest and Sam’s Club is the next lowest price. The savings aren’t astounding. $0.08/gallon at Costco and $0.05/gallon at Sam’s Club. At those rates you’d have to buy 13 gallons of gas weekly throughout the year to break even on your Costco membership. At Sam’s Club you’d have to buy 17 gallons weekly. Between GasBuddy and coupons from the backside of my grocery receipts I can come close to, and sometimes even beat, the warehouse club’s prices.
Whether its optical services, photo printing, insurance, tickets, or car buying – I think a semi-savvy shopper can find warehouse club prices elsewhere. What do you think? What makes your warehouse club membership worth it to you? If you don’t belong to a warehouse club, why not?