Does Shopping at Costco Really Save You Money?

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A membership to Costco or Sam’s Club seems like a ticket to big savings, at least at first. But after spending a few Saturdays fighting crowds so you can haul home jumbo-sized containers of mayo or a mega-pack of toilet paper, you may wonder if shopping at warehouse stores is really worth it.

While there are definitely deals to be had, shoppers who don’t have big families (or a lot of roommates) should think twice before shelling out the $45 to $55 fee for a no-frills yearly membership at Costco, Sam’s Club, or BJ’s Warehouse. A lack of storage space and difficulty consuming all that food before it goes bad means the hoped-for savings may not materialize.

For singles, shopping at stores like Costco “only makes sense if you split your purchases with another single person, especially considering they may have smaller living spaces and less room to fit those oversize packages of food and toiletries,” said consumer expert Andrea Woroch. She suggests that people who can’t buy in bulk at a warehouse club look for generic products or watch for sales of smaller-sized items at traditional retailers if they want to save.

Waste is another potential problem when big deals come in even bigger packages, especially when you’re buying food.

“You should only purchase the quantity of food that you and your family can consume,” said Jeremy Kranowitz, the executive director of Sustainable America. People in the U.S. collectively waste $450 million every year on uneaten food, he said.

“Purchasing a big sack of sweet potatoes rather than just a few individual ones may be less expensive on a per-potato basis, but if you end up throwing out half of the sack, you are worse off economically,” added Kranowitz.

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In addition to skipping the bulk produce, you may also want to think twice before buying large quantities of items like mayonnaise, nuts, spices, and olive oil, which don’t have terribly long shelf lives, especially once opened. Personal care products and over-the-counter drugs may also lose their effectiveness if they sit too long in your medicine cabinet.

Developing smart shopping habits will help you keep more cash in your wallet if you do buy in bulk. Shop with a list and resist impulse buys, said Woroch — advice that applies whether you’re at Sam’s Club or the neighborhood supermarket. And remember that while warehouse stores offer great deals on many items, they aren’t one-stop shopping destinations, especially if you’re watching your pennies.

“Sometimes you can get better deals at other places or you should skip buying some items,” Matthew Ong, the retail analyst for NerdWallet.com, told Marketwatch, though he added that for many items, Costco and Sam’s Club still offered the best deals. Consumer Reports tested products sold under Costco’s house brand, Kirkland Signature, and found a mixed bag in terms of quality and value. Bacon, laundry detergent, and car batteries were good buys, while products like toilet paper, facial tissue, and dishwasher detergent weren’t such great deals, the product testers found.

Woroch said that in her experience, warehouse stores were the best place to buy batteries. “You could get double the quantity for the same price as the package sold at my local grocer,” she said.

Other good deals at warehouse clubs include gift cards, which you may be able to purchase for less than face value, eyeglasses (Costco came out on top in this category in a 2013 Consumer Reports customer satisfaction survey), and wine (the Kirkland Signature bottles of vino are a particularly good value, wrote Jon Thorsen, author of Reverse Wine Snob, in Esquire).

Even when buying cheap items, the key to saving is buying only as much as you’re going to use, not just stocking up because something is a great deal.

“We have this basic view that buying in bulk is cheap,” Brian Wansink, a professor of consumer behavior at Cornell University, told CNBC. “We clearly come home with a lot more stuff; we end up spending more because we are motivated to save money.”

Follow Megan on Twitter @MeganE_CS

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