I used to think I knew something about bulk shopping. I was the queen of stocking up on toilet paper when it simultaneously went on sale at three different retailers. I took advantage of double and triple coupon promotions to buy enough cereal to last my family almost an entire year. But the fact is, I was just fooling myself. Because these days, you can’t say bulk shopping without saying Costco, Sam’s Club, or BJ’s.
When my husband and I were first married, we had a membership to BJ’s Wholesale Club. The reason was simple: it was the closest grocery store (and I use the words “grocery store” lightly here) to our house, plus membership came with a steep discount on gas and – you guessed it – BJ’s also was the closest gas station to our house. It was a no-brainer. We bought everything at BJ’s: food, gas, our first bedroom furniture, a new TV, a washer/dryer combo. It was our one-stop shop.
But when we moved, the nearest BJ’s ended up being more than 70 miles away, so we let our membership expire. Within a year, we were moving again – this time to a large city with a BJ’s, a Costco, and a Sam’s Club. We promised ourselves we’d buy a membership to one of these three bulk retailers once we figured out which one was right for us.
It’s been almost six years, and we still haven’t made any decisions.
Costco
Let’s begin with the facts:
- Basic annual membership cost: $55
- Membership tiers: 3 (Gold Star, Business, & Executive)
- Store locations: 590 locations in 41 states and more than half a dozen foreign countries
- Number of members: 60 million
Costco made headlines this spring for rolling out a nationwide home mortgage system. The program actually links homebuyers to a third party lender, with Costco as the middle-man. Costco says if the program continues to do well (it performed well in a pilot program in 2011), then the company may start offering student and car loans as well.
Sam’s Club
Who is Sam? Sam’s Club is actually named after Sam Walton. Name strike a bell? That’s because Sam Walton is the founder of Walmart.
- Basic annual membership cost: $40
- Membership tiers: 4 (Advantage, Advantage Plus, Business & Business Plus); also offers special memberships for college students and members of the military
- Store locations: 610 locations in all 50 states and four foreign countries
- Number of members: 47 million
Like it’s sister company, Walmart, Sam’s Club is known among the three bulk retail giants for its low prices on every day items. It was the first of the three bulk retailers to start offering paperless in-house coupons. Sam’s Club also boasts a full pharmacy, which also comes with steep discounts.
BJ’s Wholesale Club
BJ’s is the baby of the group, founded in 1984 – a whole year after Sam’s Club and Costco.
- Basic annual membership cost: $50
- Membership tiers: 3 (Inner Circle, Business, BJ’s Rewards)
- Store locations: 190 locations in 15 states, all located east of the Mississippi River
- Number of members: 9 million
BJ’s has made a name for itself thanks to several in-house brands, like the Berkeley & Jensen and Executive Choice private labels. Additionally, BJ’s is the only one of the three bulk retailers that accepts manufacturers’ coupons as well as its own in-store coupons.
Is Bulk Shopping Worth It?
I watched a really interesting documentary about Costco last week on CNBC (“The Costco Craze” - check it out of you have time), that outlined how these bulk retailers make their money. Basically, the business structure allows Costco to break even on the products and services it sells its customers; almost 100% of the company’s profits come from annual membership fees.
And it’s those membership fees that you really have to evaluate when choosing which bulk retailer is right for you. Are you going to be able to recoup your $55 membership fee at Costco? Or are you going to spend more money than you should, simply because you can?
For my family, we’re just about equidistant from a BJ’s, Costco, and Sam’s Club. In each case, we’d have to drive about 20 minutes – through heavy traffic – to any of these locations. Combine that with the membership fee and the temptation to spend money on things I don’t need, and I finally know why I’ve put off making a decision on which club to join: because I don’t need to join any of them.
Reader, do you belong to one of these bulk retail clubs? Which one did you choose, and why?
{ 4 comments… read them below or add one }
I don’t have a membership with any of them, it’s never seemed worth it to me. My mom does have a Costco membership, so sometimes I’ll go grab a few things, but only if it’ll end up saving me money.
Hi Elizabeth- I would love to share some more information with you about BJ’s. Please email me!
Costco also features a Pharmacy which you failed to metnion, in addition, they have a photo lab, fresh bakery, food court where you can still get a hot dog and soda for less than $2, a tire center, and many locations also have a hearing aid center. Costco’s Kirkland Signature house brand has attracted the attention of big names such as Martha Stewart and others that choose to partner with the company because of their high quality image. The Kirkland signature house label has been applied to products from diapers to high dollar spirits that meet or beat the national brands quality at much lower prices. Costco regularly scores better in consumer surveys than its competitors, and has the best pay and benefits package of any international retailer.
In addition to all of these benefits, Costco also has the highest average ring, and sales per square foot of the three competitors. In addition to being a success at home the company has also been a success abroad where rival Sam’s continues to struggle. Typically when a Costco opens near to a Sam’s or BJ’s customers that hold both memberships renew at a higher rate with Costco.
Employee turnover and job satisfaction is another area in which Costco outshines their competition….a word I use loosely. If you want bulk WalMart then Sam’s is the one for you but be prepared to deal with the same issues that make WalMart so distasteful to many shoppers…..long lines, no service, and poor quality goods. If you want higher grade brand name and house brand products at lower than average prices and service to boot then Costco is the brand for you. I don’t know enough about BJ’s to make an accuragte judgement but from what I have read they mirror the quality and service of Sam’s Clubs or maybe slightly better. The big problem is that unless you live on the east coast you cannot shop at one so it is difficult to make a side-by-side comparison.
I thought the writer was going to write a more substantial comparison.. but that did not happen. i would suggest that one compares some specific items to determine if the clubs save one any money… for instance the prices of gas are often 10 to 15 cents less at the clubs.. superior tires like michelin cost 25 to 35 dollars less per tire at the clubs.. organic soy milk cost about $3.50 less per 3 quarts at the clubs..Sensodyne tooth paste cost about $4.00 less at the club on a pack of three. on a foreign trip, including flight, car and hotel one can save easily 3 to 500 dollars less at the clubs…..plus discounts on prescriptions, electronics, cleaning supplies and so on….one can really saves money at these clubs. the membership fee is not wasted. I highly recommend these clubs to anyone who purchases many items for a home during the year and who can afford the membership fee.