Wholesale Club vs. Supermarket Savings Strategies   

by Stephanie Nelson 

If I had a nickel for every person who asked me whether wholesale clubs (like Costco and BJ’s) were cheaper than supermarkets, I’d be well on my way to retirement!  Although people would like a simple yes or no answer from me, I always have to respond, “It just depends.” 

There is no single store that has the lowest price on every item all of the time.  The key is to know what the price ranges for your most common items are, and then you can recognize when a store has the lowest price for your items.  You may even go to more than one store on a regular basis because the savings on some items justifies the extra time spent.

Heavy coupon users tend to get the lowest prices on their common items by shopping at traditional supermarkets for most of their purchases.  By using coupons on smaller packages that may be doubled by their stores, coupon shoppers are usually able to get much lower unit costs than the larger bulk packages of the same item sold by wholesale clubs.

However, coupons are not available for every grocery item, and some supermarkets may not double coupons.  Most shoppers are not heavy coupon users due to time constraints, so buying larger bulk packages of their items at wholesale clubs may yield a lower unit cost than buying their items at supermarkets.

There are some grocery categories that are usually much better bargains at wholesale clubs, regardless of coupon usage.  In fact, BJ’s Wholesale Club based in Natick, Massachusetts recently reported a solid increase in sales for the most common bargains found at wholesale clubs:  bottled water, soda, household chemicals, paper products, personal health products and produce.  BJ’s fresh produce sales increased a full 20% over last year’s sales. 

That doesn’t surprise me, as wholesale clubs typically offer exceptionally low prices and good quality on fresh produce.  Because there are rarely many grocery coupons available for fresh produce, families who are able to consume the larger packages of produce sold at wholesale clubs can really save.  However, smaller households may end up wasting some of their savings if they end up throwing away produce they are not able to use in time.  Smaller households would be smart to divide their produce purchases with a friend or neighbor to take advantage of this savings strategy.

Private label sales was another growth area for BJ’s, showing a 25% increase in sales as compared to last year’s sales levels.  BJ’s management acknowledged that their private label brand’s customer loyalty is increasing through exceptional value, and that they expect increased sales growth in this category.  It stands to reason that buying store brand items in bulk sizes would offer great bargains for shoppers who have the space to store large packages.

There are trade-offs and extra costs associated with shopping at wholesale clubs.  Because there are fewer wholesale club stores in a market, shoppers may have to drive further to take advantage of their bargains.  Shoppers need to factor that extra gasoline cost in to the savings equation, especially at today’s high gas prices.  However, wholesale clubs typically offer lower-priced fuel centers so that may help the overall savings equation.

There are also membership fees associated with wholesale clubs.  For frequent wholesale club shoppers, their savings typically outweighs the membership fee.  But if you do not shop at your wholesale club frequently, the $45 annual fee (at BJ’s, for example)  would quickly wipe out any savings realized on bottled water! 

If you would like to browse your local wholesale club, go along on a shopping trip with a friend or relative who is a member to see how your items’ prices compare to your supermarket bargains.  You can also ask your local wholesale club if they have free guest passes or go to the wholesale club’s website to see if they offer a shopping pass.  For example, at www.bjs.com you can download a one-day shopping pass to evaluate the store before buying the annual membership.  However, if you purchase anything on that day, before buying your membership, you will pay up to a 15% surcharge on the items.  See their website for more details.