The temptation to buy huge amounts of stuff I don’t need canceled out any savings at checkout.
I still remember the day I stopped shopping at Sam’s Club. I was hauling dozens of drinking water bottles to my car to save a few bucks. Sweltering in the August Florida heat, I had an epiphany. I make enough money, so I don’t have to do this. Then I looked at what I bought—ten pounds of coffee, 1000 Tylenol capsules and an industrial-sized plastic bottle filled with biscottis.
But what sealed the deal for me was the two one-half gallons of Tropicana orange juice. I remember the cost; a few days later, it was cheaper at Florida’s most popular and expensive grocery store, Publix! That was my BFO moment (blinding flash of the obvious). Not only was I not saving money, I was buying crap I did not need and too much of it.
These Warehouse membership chains capitalize on human nature to grab an apparent discount or the belief that we are saving money shopping there. And there is the impulse buying. I let my membership lapse and have never been back.
I have friends who swear by these stores. They buy meat there and claim it is as good as anywhere else. I have tasted it. It’s not. Many of these people have the financial means not to need these discounts. One friend brags about how much money he saves there. Then he drives back to his $2 million home on the water.
Who Benefits from These Stores?
The “big three” membership stores are Sam’s Club, Costco, and BJ’s Wholesale Club. Walmart owns Sam’s Club, while Costco and BJ’s are publicly traded companies. Walmart and Costco stocks are healthy, and the companies are quite profitable. Costco is rated a good buy and claims it is outperforming its competitors. And Walmart stock is up 18% this year. BJ’s is also publicly traded, but its stock is not as enthusiastically rated. Thus, the shareholders of these companies benefit from you shopping there.
However, unlike me, many people do benefit from these stores. If you have a large family, then you could save money by buying wisely in quantity. Or if you are purchasing large amounts of food for an organization. And if you can resist impulse purchases, shopping there makes more sense.