Spending Wisely Recently, we've seen inflation cooling. But grocery prices are still on the rise. And already, some of us are wondering how to cut down on the cost of feeding loved ones during the upcoming holiday season.
That has lots of folks wondering about the best ways to save on food, minus spending time clipping coupons.
Longtime subscribers know that I love Costco – the warehouse store that's also the third-largest retailer in the U.S.
Warehouse retailers like Costco, BJ's, and Sam's Club all tend to offer lower prices than you'd see at most other retailers. That's because they charge annual membership fees, collecting billions of dollars in revenues from memberships alone. So they can afford to accept a lower margin on the goods they sell.
But do they really help customers save that much on groceries?
To find out, we compared prices of popular products at all three warehouse stores with Giant – a popular conventional supermarket chain in our company's home state of Maryland – and a discount supermarket chain, Aldi. Here's how they looked...
(Note: The stores don't all sell the same brand/size of products, so we standardized the weights/amounts for a more direct price comparison.)
While Costco, BJ's, and Sam's Club were cheaper than Giant for most products we checked, it wasn't always by much. And Aldi was the cheapest place to shop, by far... It would cost nearly 60% more to buy the same basket of goods at Giant than Aldi, and even the warehouse stores were 30% to 40% more expensive.
Now, this research doesn't mean I'm going to cut up my Costco card... Even if a big warehouse store isn't the very cheapest place to buy groceries, it lets you save in a lot of other ways.
For example, BJ's members save $0.10 per gallon when they fill up at the store's gas station, and Sam's Club members save $0.05 per gallon. You'll also find incredible deals on clothes, appliances, and jewelry. For example, I've seen TVs sell for 65% less than you'd find at other electronic stores.
These perks don't come for free. A membership for one of these stores ranges from $50 to $120 per year (depending on the store and membership level). But if you're planning to make a big purchase, love to buy in bulk, or just enjoy hunting for good deals, a membership will be worth it.
If you don't live close to one, don't have the storage space for buying in bulk, or just don't need to buy a lot of any one product, warehouse stores might not be for you. One of the folks on my team prefers shopping at Aldi, as the products are still high quality but cost a fraction of what you would pay at a typical grocery store. That's where I'm heading next.
How do you save money on groceries? Share your tips with us at [email protected].
What We're Reading...
- Inflation is cooling, but food prices are still rising.
- Something different: Are American malls coming back to life?
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
September 5, 2023