Yahoo Finance Sam's Club vs. Costco: Is paying an annual fee worth the savings for shoppers?
Inflation on grocery prices remains high as the Bureau of Labor Statistics reports food prices in the Midwest rose 7.5% since April 2022. With prices on a steady increase, customers are searching for any ways to save money on groceries, including purchasing in bulk.
Sam's Club and Costco are two of the most popular wholesale retailers across the U.S. Both stores offer customers larger portions of product at discounted prices. The catalogues include groceries, electronics, furniture, clothing and more.
Grocery stores which sell product in large quantities are known as wholesalers. Wholesale prices tend to be cheaper than retail prices because the products are being purchased directly from manufacturers. Retailers are usually offered a discount in exchange for purchasing larger quantities of product.
Both retailers are membership based only, meaning customers must pay an annual fee for access to the locations.
While the two companies might seem similar on the surface, individual customers tend to be more dedicated to their store of choice.
In USA TODAY Network-Wisconsin's search for the best way to stretch your grocery dollars, we took our shopping list to both Sam's Club and Costco to compare prices on wholesale products, membership prices and benefits to see why customers might choose one store over the other.
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Sam's Club's membership rates are lower
Sam's Club was founded in 1983 by Sam Walton, 21 years after he founded Walmart, with the intention of giving small businesses access to the products and services they need to succeed. Now the company services businesses and families, providing both with the bulk amounts of product they need.
According to its website, Sam's Club is able to provide its customers with savings by being deliberate in the items they choose to stock. Instead of having every item in every available brand in stores, Sam's Club merchants research the most popular or requested items from customers and purchases them in large quantities.
"We also reduce costs by maintaining a simple shopping environment, often displaying our merchandise on shipping pallets so we can move new items in just as quickly as they move out," the website states.
Erica Meredith, a Sam's Club shopper in Kenosha, Wisconsin, said she purchased the membership through a discounted Groupon a year ago, and found she enjoyed the benefits that came with it.
One of the perks Meredith enjoyed is the Scan and Go feature on the Sam's Club app.
"Scan and go at Sam's is a big perk so you can get in and get out to avoid the lines," Meredith said. "I don’t need to carry a card, everything is linked. Another fun part is seeing all of the new products through the app and Facebook groups so people can share what they like and don’t like."
We shopped for items on a typical shopping list — bread, milk, produce, household needs and more — and bulked up the amount accordingly.
Silk almond milk, 3 pack: $8.28
Sara Lee 100% whole wheat bread, 2 pack: $5.52
Member's Mark bacon, 3 pounds: $9.98
Bananas, 3 pounds: $1.58
Store brand ground beef, 1 pound: $3.48
Member's Mark butter, 4 pounds: $12.68
Cheerios, 20.35 ounces, 2 pack: $6.88
Cheez-Its, 24 ounces, 2 pack: $9.42
Eggs, 2 dozen: $4.98
Gold Medal flour, 12 pounds: $7.78
Del Monte canned green beans, 14.5 ounces, 8 pack: $7.78
Smucker's strawberry jam, 64 ounces, 2 pack: $6.98
Iceberg lettuce, 2 pack: $2.98
Store brand milk, 1 gallon: $3.12
Oranges, 8 pounds: $8.27
Bounty paper towel, 12 rolls: $23.48
Jif peanut butter, 48 ounces, 2 pack: $10.82
Quilted Northern toilet paper, 32 rolls: $22.28
Triscuits, 8.5 ounces, 3 pack: $6.58
The list of grocery items totals $157.93. While it's a higher price than what we've seen in previous outings, it buys nearly triple the amount of product you would get from a traditional grocery store.
Those looking to save themselves money on bulk items at Sam's Club must first purchase one of two tiers of available memberships.
Base club membership benefits include lower, members-only prices, scan and go services that allow you to skip the line and pay using the app, Sam's Club credit, free health screenings, daily free samples and members-only savings on fuel. A base club membership costs an annual fee of $50 and comes with an additional complimentary membership card for a household member.
Plus members receive all of these benefits in addition to free shipping, early shopping, cash rewards and savings on medication. A plus membership costs an annual fee of $110 and also comes with a complimentary membership card for a household member.
Sam's Club services millions of members across the near 600 locations across the U.S. and Puerto Rico in addition to its locations in Brazil, China and Mexico.
Costco's private brand helps customers save money
Daryian Lucas and her family had been Sam's Club members up until two and a half years ago when they decided to make the switch to Costco.
Lucas said she initially switched to Costco because of the prices offered on meat.
"For ribs, it's about $10 a slab which is really affordable," Lucas said. "We also get their packs of chicken which has a great price too. It's better than what's offered at the grocery stores for the amount you get."
After shopping at Costco, Lucas said she realized she enjoyed the snack section a lot more as well, and that Costco has a more healthy snack options.
Although she enjoyed the clothing section at Sam's Club, Lucas said she prefers the savings at Costco more.
The company originally started in San Diego under the name the Price Club in 1976. Originally, the company only served small businesses but soon realized they could reach a larger audience by servicing non-business members.
In 1983, the first Costco warehouse was opened and lead the company to becoming the first company to grow to $3 billion in sales in less than six years.
"Our large membership base and tremendous buying power, combined with our never-ending quest for efficiency, result in the best possible prices for our members," its website states.
Costco also carefully chooses the stock its warehouses carry in order to maintain the best prices for members. The warehouses generally carry about 4,000 stock keeping units compared to the 30,000 found at traditional grocery stores.
While Sam's Club has more locations in the U.S., Costco has more locations worldwide. Costco has 849 locations worldwide, with 584 of them being in the U.S.
Using the same general shopping list that was used at Sam's Club, we explored the prices and quantities that Costco offers members.
Silk almond milk, 64 ounces, 3 pack: $10.99
Brown Berry 100% whole wheat bread, 24 ounces, 2 pack: $5.99
Store brand bacon, 1 pound: $3.49
Bananas, 3 pounds: $1.59
Store brand ground beef, 1 pound: $3.99
Kirkland signature butter, 1 pound, 4 pack: $10.99
Cheerios, 4.3 ounce, 2 pack: $6.29
Cheez-its, 24 ounce, 2 pack: $8.99
Eggs, 2 dozen: $4.99
King Arthur flour, 12 pounds: $9.49
Bone Maman strawberry jam, 36 ounce: $9.99
Milk, 1 gallon: $3.16
Oranges, 8 pounds: $8.56
Kirkland Signature paper towel, 12 rolls: $19.99
Jif peanut butter, 48 ounces, 2 pack: $10.49
Kirkland Signature toilet paper, 30 rolls: $19.99
Triscuits, 9 ounces, 4 pack: $11.69
Costco didn't have canned green beans and iceberg lettuce, leaving the total for this list at $142.12.
Ultimately, Costco offered nearly the same quantity of products that Sam's Club did at similar prices. However, it is difficult to compare identical prices for products between the two stores because of Costco's use of it's own private label, Kirkland Signature.
According to its website, the Kirkland Signature label accounts for about 20% of Costco's products.
Costco's membership rates run at a slightly higher price than Sam's Club, but in return appears to have lower prices.
A Gold Star Costco membership costs $60 a year and gives members access to shop online and in the warehouses, member-exclusive prices on Costco gasoline, pharmacy pick up and delivery, car services, grocery delivery and more.
An Executive membership costs $120 a year and comes with all the fore mentioned benefits in addition to a 2% annual reward of up to $1,000 on purchases and additional discounts on Costco services.
Allie Brooke of Madison, Wisconsin, has been a member of Costco since January 2017. Brooke said she visits Costco about once a month to take advantage of the bulk inventory.
"I love the high quality products for a great price, such as chicken, their pre-made meals, like tacos and mac and cheese and they have the best frozen pizza and large variety of snacks," Brooke said.
She also appreciates the variety of products they offer from clothing to camping gear and even furniture.
"I also have bought things like my mattress and espresso machine through Costco," Brooke said. "They take returns for a life time if I ever had any problems."
Reach Jelissa Burns at 920-226-4241 or jburns1@gannett.com. Follow her on Twitter at @burns_jelissa or on Instagram at burns_jelissa.
This article originally appeared on Appleton Post-Crescent: Cotsco vs Sam's Club grocery prices, membership fees comparison
