U.S. consumers are faced with what some economists call a two-tiered retail universe. It consists of traditional stores and membership clubs like BJ’s Wholesale, Costco and Sam’s Club. There are other membership giants besides those three, but collectively they make up about 95 percent of all membership business.
What’s the catch? Membership stores charge an annual fee for store access. Obtaining a member card can cost anywhere from $30 to $100. For most cardholders, the fee is a very small price to pay for major bargains on thousands of products. The club stores serve as small-scale malls in some towns, where the adjoining property is dotted with store-owned restaurants, service stations and medical offices. Sam’s Club and Costco gas station hours usually mirror those of the central stores, which means the whole enterprise resembles one big, uncovered shopping district. Why, even with substantial fees, do consumers flock to these stores by the millions? Here are a few of the key advantages uncovered by a series of shopper surveys:
Low Grocery Prices
Local retailers who aren’t part of the membership universe already know that club prices on a typical “market basket” of grocery goods are much lower than what traditional, stand-alone grocers can offer. A Consumer Reports study of membership prices found that, on average, the clubs sell grocery items for about 20 percent less than the chain grocery stores do. For a huge percentage of membership club shoppers, low-cost groceries are the main selling point of these special retail establishments. For a family of four, the math is simple: In 2019, the average cost of groceries for a family of four, for one month, is $932. That comes to $11,184. By shopping at a membership club, that hypothetical family saves 20 percent, or $2,236 each year. The $100 annual fee doesn’t seem like such a bad deal when viewed in that perspective.
If you don’t like to drive all over town doing your weekend shopping, the clubs have you covered. Want lunch? Choose whatever you like from an indoor food court. Need to get your car repaired or have new tires put on? Why not check in with the auto service department and have it all done while you shop for groceries. On the way out, you can always stop for a haircut, nail job or eye appointment in one of the many in-store service shops.
Big Discounts on Services
In addition to standard retail fare, these huge membership stores house dentists, eye clinics, pharmacies, auto dealership offices, car repair facilities, banks, hair salons, travel agencies, rent-a-car kiosks and insurance sellers. Of course, during tax season you can have you return prepared while you shop. All the membership stores offer significant savings on all the services they feature. For example, you can usually get a hearing aid at store pharmacies for about 30 percent less than you’d pay at your own doctor’s office.
Plenty of Free Samples
The “club stores” are famous for their frequent free-sample giveaways, most of which take place during high-traffic weekend shopping hours. The standing joke, which is much closer to the truth than most people suspect, is that on any given Saturday or Sunday, you can put together a nutritious meal from all the free foods offered up in the aisles of Costco, Sam’s and BJ’s.