I was shocked when I visited a grocery store and saw cans of “pop” ranging anywhere from $2.50 to $3.50 per can. If you had a gathering of friends, you could pay a pretty penny for something that I remember only paying 50 cents to $1 for a few years ago.

Have you ever gone into an Aldi store or a warehouse club such as Sam’s Club or Costco and seen their selection which is usually in large portion sizes and wonder if this really is a good deal? In many cases the answer to that question is “yes”. But a better question – is this is a good deal – for me?

We will attempt to provide some insight into the various issues involved when making that decision. This will be far from an all-encompassing verdict – we can NOT cover all of the issues that could be considered, which will differ from person to person.

Starting out on a basic level – the all-items Consumer Price Index (CPI), a measure of economy-wide inflation, increased 0.3% from July 2025 to August 2025 and was up 2.9% higher than in August 2024.

Food prices rose faster than overall inflation. The CPI for all food increased 0.4% from July 2025 to August 2025. Food prices in August 2025 were 3.2% higher than in August 2024. The food-away-from-home (restaurant and other food service purchases) CPI increased 0.3 percent from July 2025 to August 2025 and was 3.9% higher than in August 2024.¹

Prices have been high now for several years. As recently as August 2022, the rate of inflation for food at 11.4% was the highest since May 1979. The following charts shows the food inflation over the last ten years and recent price increases in certain food categories:²

Also, there is the potential impact on some products from the elusive issue of tariffs – which seemingly changes every time it gets reported. Thankfully, the most recent estimates are much lower than predicted six months ago but it is not a settled issue yet. But I think you may agree with the sentiment that food prices are generally high. I’m not predicting where they will be next year. Do these higher prices influence where you do your shopping?

It really is a hotly debated topic that contains differing views depending on the individual situation. The bottom line is that you need to decide for yourself what the important issues are for you. These issues may depend on your location, distance from stores, price, quality, selection choices, freshness, comfort with ordering online…. etc. Few people share all of the same considerations to the same degree.

Local Grocery Store

Your local grocery store usually wins in locality and the number of stores – there usually is one in your neighborhood. Obviously this saves you time – which is a valuable consideration for most people. Also, it simplifies your life a bit. The grocery store is more likely to carry a broad selection of items – so much so that you could probably get away with doing all of your general grocery shopping at one time at one store more so than not. Unlike warehouse clubs, there are no membership fees – which can range well over $100/year. Grocery stores also have coupons (delivered in your mail or in Sunday newspaper) as well as sales. Warehouse clubs don’t take manufacturer coupons. There also are cash-back opportunities which can save you money. For some of you, there are at least seven advantages that I have listed here.

Remember, warehouse clubs sell a limited roster of brands. “While you might be saving money by buying in bulk versus what you’d pay for that same brand at a non-warehouse store, you might also get pushed to buying a more expensive brand because that’s what the warehouse club has available.” ³

Let me throw in one more advantage for the local grocery store. Since warehouse clubs mostly sell in bulk size, people typically buy less at a grocery store. Buying less means taking in less calories, less fat, less sugar….etc. A Tuck Marketing study presents findings in the Journal of Marketing Research by authors from McGill University and Babson College. Briefly summarized, some of their conclusions includes the following:

• Warehouse club membership ends up NOT saving money, not saving time, and increasing the consumption of nonperishable and impulse foods.

• Club store shoppers take on about 3,500 more calories per month – a 7% to 10% increase than if they didn’t shop at that format. Note, just adding 100 calories per day to one’s diet can result in 10 pounds of weight gain over the course of a year.

The larger the family, the more pronounced these effects are (on average). The study reveals all of the factors taken in consideration such as consumer health, education level, income, family size…. etc. So, let’s add additional benefits to the grocery store side of the scale. We will generalize this as an overall health advantage bringing up our total possible grocery store advantage to eight. ⁴

I can feel people stirring in fits of rage as they read this. Because many are quick to say that the grocery store prices are higher usually (not including coupon or sales), they may not stock a specific product (e.g. Vitamin selection), they don’t sell in bulk…. etc. For many, this erases some of the benefits of a grocery store. Locally, there are the following “non-grocery” stores in Western Pennsylvania – Aldi, Sam’s Club, Costco, Target, Walmart…. etc. Again, we can’t consider all of the combination of considerations as to which store is the best for you.

Membership Fees

One drawback with Warehouse membership are the membership fees. Will you come out ahead when factoring these fees? This puts another “win” in the grocery store column which now stands at nine total.⁵

Warehouse clubs don’t have to worry about profit margins the same way other retailers do because they have a not-so-secret weapon in their back pocket — membership fee revenue.

During Costco’s last fiscal quarter, membership fee income increased 14% on a year-over-year basis. And much of that came from Executive memberships. Costco members get a choice of membership tier when they sign up. A basic Gold Star membership costs $65 per year, while an Executive membership costs $130.

But Executive members get a host of added perks. Costco Executive member benefits:

• 2% cash back on most Costco purchases
• Early shopping hours during the week and on weekdays
• A $10 monthly credit on same-day grocery orders of $150 or more

Costco is invested in adding extra value for Executive members because it wants more people to join at, or upgrade to, that tier. The priority placed on Executive members has angered some Costco shoppers as they are solicited for increasing their membership status while in the check-out lines.⁶

In Part 2, we will look further into the advantages that warehouse clubs say that they offer.

References

1. https://www.ers.usda.gov/data-products/food-price-outlook/summary-findings#:~:text=Consumer Price Index for Food (not seasonally adjusted)
2. https://www.usinflationcalculator.com/inflation/food-inflation-in-the-united-states/
3. https://www.kiplinger.com/personal-finance/spending/601239/products-you-will-waste-money-buying-at-warehouse-clubs
4. https://tuck.dartmouth.edu/news/articles/new-tuck-research-finds-club-store-shoppers-spend-more-and-eat-more
5. https://www.howtomoney.com/warehouse-clubs-worth-it/
6. https://www.thestreet.com/retail/costcos-aggressive-new-tactic-upsets-members?