A few weeks ago, my article on inflation was featured by my good friends at the Stacking Benjamins podcast. Interestingly, the most controversial part of my article for them was the tip to shop at a warehouse club to save money and stock up. Apparently none of the crew on that day shop at warehouse clubs like Costco, BJ’s, or Sam’s club. They’re prone to impulse buys, or their family size means it doesn’t make sense, their lifestyle doesn’t mesh with it, or other reasons.
The more I mulled over their comments, the more I realized I needed to take a fresh look at warehouse club shopping. My family of five – including three adults and one teenager who is taller than the adults – consumes more than enough to mean the quantities we get at BJ’s. We’ve been shopping at warehouse clubs since my oldest now adult son was a toddler. At first Costco, but later when a BJ’s came to our town we switched as it was much closer.
We’ve been doing it so long we haven’t questioned in a long time how much were we really saving. Or talked about why it makes sense for us but not for others. Especially since we now have an Aldi in town, and a Target with a grocery store – were we really saving any money? And in my prior article, I didn’t go deep into tips to use to see if shopping at a warehouse club makes sense for you, and if not what might work better for your particular situation.
So this week I’m going to do a bit of an old school series on warehouse clubs. Today I’m going to share with you the research I did to look critically and closely at a typical BJ’s shopping trip and see what, if anything, we saved over other options in town. On Wednesday I’ll go through a bunch of warehouse club shopping tips. And on Friday I’ll talk about how to figure out what kind of shopping options work best for your family.
If you don’t want to read the disclaimers or my analysis process, you can use the table of contents above to jump straight to “the big reveal”. But before I show you why BJ’s list and give you the low down on BJ’s vs. Target vs. Price Chopper vs. Aldi’s, I want to give a few disclaimers. After all it could be easy to view this list and draw the wrong conclusions:
- This isn’t the complete list of everything I might buy at BJ’s, just what I bought this past week. Some things, like plastic wrap, I just didn’t need.
- This isn’t what you should buy at a warehouse club. Today I’m analyzing whether or not what I bought was a good deal.
- Some of the brands and items I buy, you wouldn’t want to buy. Also I might not be buying something you love. We’re all different!
- We are a family of five with four of us adult sized; we live in a suburban house with plenty of storage; we only eat out about once a week. These aspects of our lifestyle drive our list.
- This isn’t all I bought for us to eat last week. I also shopped at a farmer’s market, like I do every Friday in the summer, and we got our CSA (Community Supported Agriculture) share. Those plus items already in the pantry were used in our meals for the week
- This took a long time. So although you’re welcome to perform this same analysis on your own list, be forewarned that you’ll need to spend a lot of time doing it. Once it’s done, though, you would just need to update once in a while as sizes, prices, preferences, etc. change.
- Some things were on sale this week, or had coupons. They might not be discounted every time. Consider this a snapshot in time.
- I visited the stores in person to avoid the price differences you sometimes get shopping online. Things can sometimes cost more shopping online than in store
- Not all the things I buy are necessary. I could make my own homemade versions of these things, do without, or buy alternatives if I needed or wanted to. So can you.
- These same four stores probably aren’t in your own town. Price Chopper, for example, is a regional grocery store and you might have a Costco or a Sam’s Club closer to you.
- I bought something at each of the stores, although I didn’t buy this entire list over and over again. So shopping at multiple stores, for me, seems to increase impulse buys (more about that later this week…)
The Process & Some Observations
Over the course of the past week, I went in person to Target, BJ’s, Price Chopper and Aldi to get prices on the same items. I noted down the size and price of each item, matching brand wherever possible. Where I couldn’t match the brand I noted down the price of a comparable alternate. Aldi’s was sparse on comparable alternatives at times, so in those cases I noted down the price of their only offering. Target, Price Chopper and Aldi’s all were missing some of the items I got at BJ’s, so in those cases I noted the item as “N/A”.
Have you ever seen a personal finance article or site blithely throw around how you should “compare unit prices!” when deciding what to buy at a warehouse club? Well this experiment showed me just how hard that is. But also how necessary it is.
Why is it tricky? First and foremost, the units are different between stores. Take bananas for example. Target prices them per banana. BJ’s prices them per three pound bag. Price Chopper and Aldi’s price them for one pound. To compare I needed to calculate how many bananas are usually in a pound. Same with apples, grapes, and honestly most of the produce. This makes on the fly pricing comparisons difficult.
Also sometimes you can’t get the same brands, or you can get the same brand but not the same items. Like most families, we have some items where we don’t care about brand (e.g., English muffins, plastic wrap) and others where we very much do (Tidy Cats Lightweight Cat Litter and Iams dog & cat food). There were also times where I can get the same brand, but not the exact same items. This also makes comparisons difficult. Comparing a Ziplock multi-pack where I can get sandwich, snack, quart and gallon bags together against buying them separately was tricky. Same with comparing organic Annie’s Mac n cheese variety pack (BJ’s) with regular Annie’s Mac n cheese.
In the end I just did the best I could, keeping in mind where I cared about the brand or item and where we don’t. After all that’s what will drive how much will my family really save if we were to shop at a warehouse club or elsewhere.
I put my shopping list into the notes on my iPhone and copied it four times, once for each store. Then as I navigated the stores, I noted down the largest version of the item (or comparable if I had to) price and unit/weight. When I got home I typed all the data into an Excel spreadsheet, normalizing the unit measurement so I’m not trying to compare the cost of one banana versus one pound of bananas. Then I calculated what would the cost be to buy the same amount of the product I purchased at BJ’s at each of the three alternative stores.
The Big Reveal – What’s The Price Comparison Look Like And Who Wins The Savings Battle?
All right, enough preparation discussion, lets dive right in to the glorious table of nitty gritty details. And just as important as the raw data, let’s talk about the insights this data gives me.
You’ll notice some color coding above. Green is code for where I can get the exact item cheaper elsewhere. Yellow, which you see a lot of at Aldi’s, is where I can get a similar (or similar-ish) item for less but can’t get the exact same one. Grey means that I couldn’t find the item or a reasonably similar equivalent on that day.
What Are My Personal Insights?
You’ll notice that Aldi’s has a lot of green and yellow, as well as a much lower total price than BJ’s – but also the most “N/A’s”. This means I couldn’t get the item or something reasonably similar. When I remove all the “N/A” items in the Aldi’s column from my BJ’s spending total, the amount I would have spent drops down to $425. Meaning that even with all the green and yellow items at Aldi’s, I would only save $25 by shopping at Aldi’s over BJ’s. And I wouldn’t have been able to get a lot of things on my list.
Like many of you, I suspect, my family is perfectly fine with some of the off brand Aldi’s items but others not so much. For example, the dog food and cat litter at Aldi’s alone would save me $46.82. But I wouldn’t buy those brands. I have a senior dog who’s eaten Iams his entire life with us, and we had an issue in the past with a pet who didn’t react well to switching foods.
My husband is the one who takes care of the cat litter. He prefers the Tidy Cats light, instead of the heavy stuff that feels like lead. He says that he likes it because “it’s light and it clumps better than the other stuff”. Don’t know about you, but I’m not going to argue with anyone who wants to change the cat litter instead of me having to do it!
In our case we both can afford and prefer the alternative name brand option. So instead of getting the less expensive item, we choose to try and get the more expensive item at the least price possible. But generally I’m a big fan of always at least trying the store brand – you just might find a less expensive option you like! At Aldi’s, for instance, we like their wheat bread and chocolate chips just fine.
A Stark Picture Emerges
When I remove all the items I couldn’t buy at Aldi’s because they didn’t have an equivalent or where I wouldn’t want the alternative option for my family, it’s clear that shopping at BJ’s is the winner for us. Those items would cost $285 at BJ’s compared with $333 at Aldi’s. The cost savings is over $100 when compared with Target, and almost $200 when compared with Price Chopper!
In fairness, you (usually) have to pay for a membership to these warehouse clubs in order to shop there. The cost for the least expensive membership tier at BJ’s is $55 per year. Sometimes you can get a membership for less through a school program. But with such significant savings, my family would make up that difference in less than two shopping trips.
Many of the items which would be less expensive at Aldi’s are not such a significant cost savings that it would be worth going there every week for us. Both my husband and I now work full time. My work is actually much more than full time, and I travel a lot for work. I don’t want to spend my limited evening and weekend time going around to multiple stores to save, for example, four cents on brownie mix.
If my family were in a different situation, or one of us were still a stay at home parent, it would be more important for us to optimize the amount we spend to the greatest extent possible. Instead, at this moment in our lives, it’s more important for us to eat reasonably well and get the greatest savings we can for the least time spent. That means shopping at a warehouse club once or twice a month to stock up. Then combining those stockpiled pantry items with weekly local fruits and veggies; and trips to Aldi’s or other grocery stores to round out the gaps.
There’s More Coming Soon! And What About You?
Later this week, come back to my site for all my warehouse club shopping tips and tricks; as well as some thoughts on how to determine the best shopping strategy for you and your family.
In the meantime let me know – have you ever done an analysis like this on your own spending habits? And do you find warehouse club shopping to be good for your family, or a waste of money and full of impulse purchases?