Sam's Club or Costco?
Deciding whether to join Costco or Sam's Club is no small task. Both warehouse giants offer an array of discounted goods and services including grocery items, prescription medications, electronics, automotive supplies and services, and more. Both also promise exceptional deals compared with retail. Which, if either, is the better choice? We became members and shopped at each to find out.
Costco vs. Sam's Club: A Wholesale Club Showdown
A head-to-head comparison between Costco and Sam's Club reveals a host of similarities. When pressed to declare a victor, we settled on Costco -- by a hair.
If you join just one warehouse club, assess your needs against each retailer's strengths and inventory before making a choice. Both Costco and Sam's claim large followings, and consumers seem to have their loyalties. Costco boasts more than 76 million cardholders and Sam's Club has about 47 million members. We found few online reviews of the warehouse clubs overall; those we did find focus mostly on a particular product or service. We considered this user feedback in our evaluation of the two stores, informally polled consumers online, and noted the results of broader surveys. We also relied heavily on our own shopping experience in declaring a winner on a variety of fronts, from prices to pharmacy to return policy.
Locations.As of early 2015, Costco operated 671 outlets, including nearly 200 located abroad. Of the 474 stores in the U.S. and Puerto Rico, about a quarter are in California. Costco locations also tend to cluster in urban centers. Sam's stakes claim to 647 clubs throughout the U.S. and Puerto Rico. (BJ's counts just 226 locations concentrated in the eastern U.S.)
Membership Options.Both Costco and Sam's Club offer three membership levels. At Sam's Club, the cheapest option is Sam's Savings, which costs $45 a year and comes with one primary card and one for another household member, plus access to personal and business services, some of which are free. At Costco, the Gold Star level costs $55 a year and also comes with two cards and access to a raft of personal and business services, as well as savings on prescription drugs when insurance coverage is limited or absent.
Sam's Business ($45 a year) allows early-bird shopping and up to eight add-on memberships ($45 each). A Costco Business Membership ($55 a year) allows for six additional cardholders and lets shoppers resell merchandise.
Both stores offer cash back on purchases at the priciest membership level. For $100 a year, Sam's Plus returns $10 for every $500 spent on qualifying items (up to $500 a year); grants extra savings on select prescription drugs (five are free) in the absence of insurance coverage; and lets businesses add up to 16 members. Costco's Executive Membership, which costs $110 a year, provides extra savings on available services, plus 2 percent back on qualified purchases (up to $750 a year).
Bottom line: Sam's Club memberships are cheaper, but the higher fee at Costco is a good investment for shoppers who take advantage of the prescription program and wider selection of cut-rate services. The cash-back feature makes Costco's Executive Membership the cheapest deal of all for big-time warehouse shoppers. Both clubs give full refunds to customers unhappy with their shopping experience.
Grocery Shopping Cart Test.To compare Sam's Club and Costco prices (see chart), we shopped for a family of four, including an infant. Into our cart went 30 perishable and packaged grocery items, personal care products, and other household essentials. Item for item we tried to pick the same brand in the same quantity at each wholesale club. When possible, we selected in-house brands -- Member's Mark and Daily Chef (food) at Sam's Club and Kirkland Signature at Costco.
The total haul: $345.81 at Costco and $321.43 at Sam's Club. Although 21 of the 30 items on our list were cheaper at Sam's, the higher prices at Costco often reflected larger quantities. To account for these differences in package size, we calculated the price per unit (per ounce, per diaper, etc.). By that measure 16 items came out cheaper at Sam's Club; 14 were cheaper at Costco. Overall we saved an average of 8 percent on the products that were less costly at Sam's Club compared with Costco and about 11 percent on the products that were cheaper at Costco.
The super-size packages of many items at wholesale clubs may deter some consumers, especially those with few family members or who lack lots of storage space. At both stores, for example, apples come in bags of 40 -- can you eat or cook that many before they go bad? Such large amounts are no doubt useful for parties, daycare centers, group picnics, and big families. Our hypothetical family of four would find a Sam's Club or Costco membership most valuable for stocking up on cleaning supplies, paper goods, condiments, baby supplies, and grocery items that won't spoil anytime soon. For consumers worried that bulk buys will go to waste, it's worth noting that in the cases where package sizes differed, Sam's Club almost invariably sold a smaller quantity.