Take a step into any one of Kansas City’s warehouse discount stores—Costco or Sam’s Club—and you quickly realize their vast appeal with the consumer market has nothing to do with their visual appeal. A concrete slab, stark tin walls and sparse fluorescent lighting make for a cold aesthetic, with nothing but towering aisles bedecked in shrink-wrapped pallets to adorn the massive interior. But from the time you enter the parking lot—and search rather fruitlessly for an available parking spot regardless of time of day or day of the week—it’s obvious these storefronts are a shopping oasis of sorts for many. Only instead of seeking white sandy beaches and palm trees, warehouse members flock in droves to find solace in jumbo packs of batteries and economy-sized bundles of toilet paper.
Do warehouse stores really deliver massive savings though? In short, the answer is a resounding yes and no, all depending on how members shop.
Warehouse stores work on a very simple principle: By purchasing in bulk quantities, they can sell products to their members in wholesale form which, in turn, provides a general savings of 30 percent or more off retail value. Saving money isn’t free, though. Warehouse stores require an annual membership with an up-front cost that starts at $45-55 and can go up to $100 for executive status, which rewards its holders with a 2-5 percent rebate on purchases along with additional discounts on sales and services.
Once members sign up, they are quickly on the hunt to find ways to justify the membership cost. That, coupled with the appeal of general savings can create an impulse to buy more. Members can easily go on a budget-busting spree, justified by the knowledge that they are getting a great deal.
Priya Raghubir, an NYU marketing professor, confirms another drawback of bulk buys: Multiple studies prove that larger portion size is linked to higher consumption. “My personal opinion is that people actually spend more [in the end when shopping at warehouse stores],” she says. This is particularly problematic with perishable food items that stare an owner in the face every time she enters the kitchen. After all, it’s hard to ignore two behemoth-sized loaves of multigrain bread or a gigantic crate of organic spinach every time you open the refrigerator. What usually ensues is guilty buyers’ overindulging as though their bulk purchases were manna from heaven.
So do you need to have a large family to capitalize on warehouse store savings? Not at all. The key is to shop smart. Milk, for instance, is available by the gallon and typically a dollar cheaper than anywhere else. The savings on that weekly purchase alone easily covers the cost of a basic membership. Avoid buying fresh produce in bulk unless your family can consume it before it expires. Stick to a list, do your homework (while a majority of items are great buys, not all are) and determine whether the perk of a bulk buy is worth the drawback of taking up storage space at home. Lastly, fill your tank. Lower gas prices are one of the best rewards of a membership!
Olathe writer Lauren Greenlee has been a Costco member for five years and she’s never looked back!