Sam’s Club vs. Costco: Which is better?

Posted
Mar 18 2009, 04:57 PM
by
Karen Datko


Is Sam's Club cheaper than Costco? Ashley at Wide Open Wallet wanted to know, so she did a price comparison of 33 items.
The result? The items, in total, would have cost $399.47 at Sam's
Club and $406.41 at Costco. About a dozen of the items were cheaper or
the same price at Costco. Otherwise, Sam's Club ruled. She also notes
that Sam's Club has a cheaper membership fee and a clearance section.
(Her Costco does not.)
Regardless, she still prefers Costco. Here's why:
She loves the coupons that Costco mails out. Also, Costco is closer to home and, quite frankly, she doesn't like Wal-Mart,
which owns Sam's Club. She adds, "And the longer I live, the less time
I want to spend at Wal-Mart." Other bloggers say Costco has better
selection, particularly for produce, meat and clothes.
Not everyone has the opportunity (we're among those folks) -- or storage space -- to benefit from warehouse clubs. But for those who do, Sam's Club vs. Costco is a popular topic. For instance:

• Melissa at Food, Fires and Fitness offers a "Sam's Club vs. Costco showdown." (She's leaning toward Sam's Club.)
  
• Peter at For Peter's Sake thinks
  Sam's Club is better. He cited lower membership and product prices,
  better signage and also made this observation about the snack bar:
  "Sam's Club has cheaper pizzas, and they have those delicious soft
  pretzels that I love so much. Costco has no pretzels, which makes me
  sad." He gave Costco points for the berry smoothie.
  
• Grocery Mama is curious about what her readers think because she has a free one-day pass to Sam's Club from Allstate (.pdf file) that's good on March 31.
  

How does Costco compare with regular grocery stores? Ashley has also done a price comparison between Costco and Wal-Mart.
She had lots of Costco coupons, and Costco won hands down. (Another
post comparing Costco and three supermarkets, including a Wal-Mart, can
be found at the Addicted to Costco! blog.)

What's important to you when you're selecting a warehouse membership store? Of these two biggies, which one is better?

http://blogs.moneycentral.msn.com/smartspending/archive/2009/03/16/sam-s-club-vs-costco-which-is-better.aspx?GT1=33009

I have memberships at both...like Sam's for bulk basic stuff...costco for more specialty stuff...

I love the Fresh fruit and Vegetables they have in the walk in cooler. I also like the wine prices at Costco.

I have memberships to both also.

They are closing the Sam's Clubs here and I am disappointed. I really liked Sam's club it was never as busy as Costco (probably why they are closing). I guess I will have to renew my Costco membership. Don't get me wrong I like Costco also, just prefred Sam's and it was closer to my home.

There is a major difference though. Costco tries to buy more American made products also they treat their workers really well. It's always rated as one of the best in that area. If I had to pick, I'd go to Costco even if it was slightly higher.
Oh, and it's clean. Sam's and Walmart always look grungy to me.

Here are some stats:

Costco vs. Wal-Mart as reported by the companies.

Employees covered by company health insurance
Costco 82%
Wal-Mart 48%

Insurance-enrollment waiting periods (for part-time workers)
Costco 6 months
Wal-Mart 2 years

Portion of health-care premium paid by company
Costco 92%
Wal-Mart 66%

Annual worker turnover rate
Costco 24%
Wal-Mart 50%

Costco pays starting employees at least $10 an hour, and with regular raises a full-time hourly worker can make $40,000 annually within 3½ years. Cashiers are paid $10.50 to $17.50 an hour.

Costco also pays 92% of its employees' health-insurance premiums, much higher than the 80% average at large U.S. companies. Wal-Mart pays two-thirds of health-benefit costs for its workers. Costco's health plan offers a broader range of care than Wal-Mart's does, and part-time Costco workers qualify for coverage in six months, compared with two years for Wal-Mart part-timers.

"From day one, we've run the company with the philosophy that if we pay better than average, provide a salary people can live on, have a positive environment and good benefits, we'll be able to hire better people, they'll stay longer and be more efficient," says Richard Galanti, Costco's chief financial officer.

Costco has several advantages over Wal-Mart that help it extend such unusually generous pay and benefits. Costco has a more-upscale reputation than Sam's Club, helping it attract shoppers with higher incomes. The average Costco store rings up $115 million in annual sales, almost double the Sam's Club average. And Costco, which charges $45 to $100 for yearly memberships, doesn't spend any money on advertising.

Costco says its higher pay boosts loyalty: Its employee turnover rate is 24% a year. Wal-Mart's overall employee turnover rate is 50%, about in line with the retail-industry average. Wal-Mart doesn't break out turnover rates at Sam's Club. High turnover creates added expense for retailers because new workers have to be trained and are not as efficient.