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Good Deals at Warehouse Stores

Warehouse Stores: Deal or No Deal?


We're thrilled to present this smart Kiplinger story here on Savvy!

It’s no secret that warehouse stores can offer compelling value. The markup over wholesale prices averages about 14 percent, according to Michael Clayman, editor of Warehouse Club Focus, an industry newsletter. Compare that with a 25 percent to 50 percent markup at conventional retailers, and odds are you’ll find lower prices at warehouse stores.

But there’s no guarantee that every item on your shopping list is a better buy at a warehouse store. In some cases, your neighborhood grocer or the local Wal-Mart can top prices at Costco, Sam’s Club or BJ’s. The best way to nab a deal is by shopping strategically.

There are several factors to consider as you compare costs at warehouse stores to those at non-warehouse retailers:

Membership fees. Sam’s Club charges $40 a year; Costco and BJ's charges $50 annually. If you shop a warehouse store only once or twice a year, your savings might not offset the cost of membership.

Selection. Warehouse stores stock fewer brands than conventional retailers, so your favorites might not be available. Ask yourself: Can a Charmin family survive the switch to Quilted Northern?

For more factors, read after the jump.

Unit costs. Even if the top-line price at a warehouse store is tempting, don’t neglect to calculate the unit cost. It’s the apples-to-apples (or roll-to-roll) comparison that matters most.

Quantity. Items at warehouse stores often come in bulk packages. Consider whether you have the storage space — and whether you’ll really use it all.

Loyalty discounts. Many retail chains have free loyalty programs that offer added savings at the register. Combined with coupons, loyalty programs can sometimes undercut everyday prices at warehouse stores.

Don’t limit your warehouse shopping to staples. As you’ll see from these examples, bargains can be found on unusual big-ticket purchases. But for some items, you can find a better deal elsewhere.

Televisions: DEAL

A giant Vizio 65-inch Class 3D 1080p 120Hz LED Edge Lit LCD HDTV from Sam’s Club was $400 less than its listing on Amazon.com. We also found a Sony Bravia 55-inch set at Costco that was $300 cheaper than Best Buy’s cheapest Sony Bravia 55-inch model. If a big screen at a small price is your goal, then you’re in luck.

Here’s the caveat: Warehouse stores carry a limited selection of TVs. Most have specific model numbers that you can’t find anywhere else, so precise cost comparisons can be a challenge. For example, the specifications of the two Sony Bravias we compared varied slightly. Go elsewhere (and pay more) only if you require a wide selection of sets and brands, or if you have your heart set on a specific model.

Appliances: NO DEAL

The warehouse stores we visited had no washers or dryers in stock, compared with Sears, which had dozens of choices on the floor. The warehouse stores’ online selection wasn’t much better. There was only one washer and four washer/dryer combos available on Costco’s Web site. Sam’s Club had two washers and one washer/dryer combo from which to choose.

Costco’s price on a Whirlpool 3.5-cubic-foot, top-load washer did beat Sears’s price on a similar washer by $80, but that was the everyday price charged by Sears. Appliance retailers run big sales promotions over just about every holiday weekend, from Presidents' Day to the Fourth of July to Veterans Day. Time your purchase wisely and you can find bigger discounts — and better selection — away from the warehouse stores.

Beer: DEAL

You won’t find six-packs here, but you will find an array of single craft bottles and cases of popular beer. And like many warehouse products, discounts come with bulk purchases, so make room in the fridge.

A 24-pack of Heineken at Costco can cost about 10% less than it does at a local grocery chain. A four-pack of Guinness can cost twice as much per can at a local grocery store compared with a 24-pack at a warehouse club.

Read on to see which items are deals at warehouse stores.

Check out these smart tips from Kiplinger:

QUIZ: Warehouse Club . . . Deal or No Deal?

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Source: Flickr User David McKelvey

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