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Costco, Sam's, vs Amazon Prime: Can warehouse stores still compete?

Checking if warehouse stores are still worth the cost
Posted: 4:04 PM, May 02, 2019
Updated: 2019-05-02 20:04:55Z

Can Costco and Sam's Club stay relevant in 2019?

More importantly, are they still worth the annual membership fee?

That's what a lot of shoppers are wondering these days, now that Amazon Prime can have almost any household product at your doorstep in two days.

Amazon makes ordering easy with its Amazon Dash button. Out of paper towels or Tide detergent? Just push your Dash Button, and a refill is on the way. Its Subscribe and Save program gives Prime members up to 15% off on products you order regularly, such as diapers.

So why would anyone still join Sam's or Costco?

Simple: One woman says it's because they offer services you still can't get through Amazon. Plus she says, price isn't everything.

Shoppers love their Costco membership

Elisa Wright threw open the doors to her laundry room on a recent Thursday afternoon.

"This is our Costco closet," she said. Inside the laundry room were shelves filled with dozens of Costco products from a recent haul, many of them its Kirkland house brand.

"Kirkland brand is one of the best brands out there," she said. "A lot goes into that name."

Consumer Reports Magazine, in recent tests, agreed, giving Kirkland high marks for paper products, maple syrup and olive oil, among other things.

"I have paper towels, fabric softener, Kleenex, laundry detergent, and more, all right here for when I run out," Wright said.

But what really sells Costco for Wright is the food.

"Oh my gosh I love all of their food. The rotisserie chickens are amazing when you don’t want to cook dinner that night," she said.

Heather Wolf agrees. This busy mom has both a Costco membership and an Amazon Prime membership. And while she prefers Amazon for convenience she loves being able to grab whatever she wants on the way home from work.

"You run out of toilet paper, do you have 24 hours to wait for Amazon to deliver it?" she asked.

Wolfe said one downside of Costco and Sam's are the larger sizes of many items. She said their salad bags, for instance, are too large for her small family.

But she said she purchases things with long shelf life, such as olive oil, which she said is a great value.

Grocery stores fight back

Not to be left out of this battle are grocery chains like Kroger.

California-based Gina Zakaria, founder of the money-saving blog "The Frugal Convert," told us that when it comes to smaller packages, local supermarkets often top Costco, Sam's and even Amazon.

"A lot of time you can find things like diapers that are a much better deal at grocery stores," she said. "Snack items, like the prepackaged foods of kids lunches, those tend to be better at grocery stores."

But she says in a recent article that warehouse stores have a real price advantage when it comes to bulk items like rice, detergent and paper products, which, she said, are almost always cheaper.

Warehouse clubs roll out services

Meantime, Costco, and especially Sam's, are upping the number of services they offer to keep shoppers coming back despite Amazon's lure.

You can stop by for prescription drugs, hearing aids, eyeglasses, and even have tires put on your car while you are waiting.

Consumer Reports Magazine said Sam’s Club and Costco's prices on those services are lower than most other chains. Their pharmacies have come in tops in several recent surveys by the magazine.

Joanie Demer, the nationally known Krazy Koupon Lady , broke down the differences.

She says:

  • Costco is best if you buy a lot, shop for organic vegetables, and like their top-rated Kirkland products. Its membership fee is now up to $60 for 2019.
  • Sam’s Club is best for all its extra services (such as tires and eyeglasses), and annual membership fees as low as $20, if you grab one of their many promotions.
  • Amazon Prime is best for convenience, though its annual fee recently jumped to $119.

So which is best?

If you are deciding between Sam's, Costco, and Amazon Prime, where you live may make the decision for you.

Sam's closed 60 underperforming stores in 2018, making Sam's a more difficult-to-get-to option for many shoppers.

And if a club is more than 20 minutes away, Amazon Prime may be your best option, as you may rarely use that membership.

A 2017 Krazy Coupon Lady survey found Amazon about 12% more expensive than Costco or Sam's.

UPDATE: Her newer April 2019 comparison of 40 items found similar results, with Costco having the lowest price on many items.

So while online shopping is the future, with Dash buttons, subscriptions, and maybe drone delivery in a few years, right now there are still plenty of good reasons to join a warehouse club.

Elisa Wright won't drop her Costco membership.

"There are just certain things Prime is not going to do for you," she said. "Prime won’t deliver my rotisseries chicken if I am picking it up on the way home from work."

No it won't, at least not until it figures out how to fly you a hot chicken via drone.

As always, don't waste your money.

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