Wednesday, February 15, 2012

Bulk Warehouse Stores and Deceptively Bad Value

In recent years, the warehouse stores such as CostCo, Sam's Club, and BJ's have become popular for their cheap, bulk-priced items. Who doesn't love their 5 gallon drum of mayonnaise and gallon jugs of hot sauce. Research has shown though, that just because you can buy things in bulk does not necessarily mean that they are cheap. I have definitely fallen into this trap before, where I assume that just because an item comes in a huge package, it's most likely cheaper at the warehouse store as compared to the local supermarket. But apparently, I am wrong in that thinking. Squawkfox.com recently published an article that includes a price comparison between items, and a list of things that are actually cheaper at your local supermarket.

source: http://www.squawkfox.com/2011/04/15/costco/
According to them, we should buy fresh foods at our local supermarkets, while their frozen counterparts were much cheaper (and better quality when it came to CostCo's Kirkland brand) at the warehouse stores. While squawkfox gives specific examples of price differences, this concept is applicable in making purchasing decisions in general. In finding value in our purchases, it is important to note the price and quality per unit to ensure that we are getting our money's worth, and not falling for packaging trickery that will try to sell us less for more. Another recent example has been the downsizing of items in the name of "health," while charging the same amount. Yogurt packaging as well as soda has recently been switched to smaller packaging while the price has remained the same.

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