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Joining a warehouse club store is a great way to save money on groceries, cleaning products, and a host of other purchases throughout the year. But choosing the right one may be challenging.
If you have access to both Costco and Sam’s Club, you may be on the fence as to which one to sign up for. Both stores are known for their low prices and wide range of benefits.
But while you could easily make the argument for either store, you should know that there’s one area where Sam’s Club has a clear advantage. And it’s something you ought to consider when making your decision.
Sam’s Club wins on price
In October 2022, Sam’s Club raised the cost of its basic membership from $45 a year to $50. At that time, the cost of an upgraded Plus membership rose from $100 to $110, and prices have held steady at these levels ever since.
But 2022’s price hike was the first of its kind for Sam’s Club in nine years. By contrast, Costco typically looks to raise its fees every five years.
Granted, this last time around, Costco went a little more than seven years without a fee hike. It raised the cost of a basic membership from $55 to $60 per year in June 2017, while the Executive membership fee increased from $110 to $120 at that time.
Come Sept. 1, a basic membership will cost $65 per year, while an Executive Membership will cost $130. Prior to June 2017, Costco raised membership fees in 2011 and 2006.
But all told, not only does Costco tend to raise its fees more frequently than Sam’s Club, but as of Sept. 1, the gap in costs will be pretty substantial. Joining Sam’s Club could save you $15 on a basic membership or $20 on an upgraded one that puts cash back in your pocket. These aren’t small amounts for budget-conscious households.
Costco might still make the most sense
It’s pretty clear that from a membership fee perspective, Sam’s Club makes the most sense to join. But your goal in signing up for warehouse club access should be to actually use it. That’s what allows you to recoup your membership fee and enjoy savings during the year.
If you have a Costco store that’s much closer to where you live, or far more convenient, then that alone is a good reason to say no to Sam’s Club. The easier it is to put your membership to good use, the more you stand to benefit.
Plus, you might simply prefer some of Costco’s offerings to Sam’s Club’s. Maybe you love Costco’s bakery, whereas with Sam’s Club, you could take it or leave it. Or maybe the selection of goods at your local Costco happens to check more items off your personal list than Sam’s Club.
It’s OK to consider the cost of a membership when deciding which warehouse club to join. But that shouldn’t be the only factor that goes into your decision.
If you have a Costco and Sam’s Club that are equally convenient to get to and whose inventory you find similar, then by all means, save your money and stick to Sam’s Club. But don’t be afraid to prioritize convenience over cost as long as you can afford the extra $15 or $20.
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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
