With the soaring cost of groceries, gas, and everything else spiking these days -- coupled with inflation running over 8% a year -- many shoppers are taking a second look at warehouse clubs.
Charlotte Lee is proud of the haul she just got at Sam's Club this April day.
"I got some Corn Flakes, some paper towels, and paper plates," she said.
This mom says her $45 membership fee was a smart investment. "Yes it's worth it," she said.
With beef, chicken, and so many other prices soaring, it would seem that memberships to Sam's, Costco, or BJ's Wholesale would be a great money-saving idea this year.
After all, almost all of their products -- per ounce or per unit -- are priced less than the grocery store.
Another big plus: Their gasoline is usually 10 or 20 cents lower than nearby gas stations.
They promise big savings if you buy in bulk. But will it really save much money?
Know the pros and cons before you join
Warehouse clubs have both pros and cons, according to like marketing expert Kelly Goldsmith of Vanderbilt University.
One of the biggest downsides, she says, is the chance of buying more than you intended.
"So you're thinking I'll just go to Costco and stock up on shampoo, toilet paper, and paper towels," she said. "Well if you're the type of person that every time you go, you end up coming home with a patio set, you are not saving money."
Some questions to ask before you join:
- Can you resist the urge to impulse shop?
- Will you go often enough to justify the annual membership fee of $40 to $60?
- Is it too far from your home?
"Think of your time as an opportunity," she said. "You could be making money with that time, so think if this something that's actually going to benefit you in the long run, given the cost of your time and given the commute to the store."
Besides the time commitment (a visit to a warehouse store can suck 2 hours or more out of your day), she says you need to think about the larger sizes that you need to purchase in most cases.
- Do you have the pantry space for the larger sizes of paper products and detergent they sell?
- Is your refrigerator big enough to hold the large sizes of perishable food?
- Will you be able to eat everything or will it end up going to waste?
If you have space for it all, Goldsmith says that food can be significantly cheaper than at the grocery store, which is a big saving these days.
"If you look at things like meat and cheese," she said, "these are items where you really can save money,"
Bottom line: If you can control your impulse buying, a warehouse store will lower your grocery bills over time, and that way you don't waste your money.
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