Consumer Reports reveals Costco and Sam's Club offer better prices

Posted Tuesday, April 10, 2007

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CR determines which warehouse club is better for consumers' specific needs; Tips to get your money's worth at both

Yonkers, NY - Consumer Reports examined the nation's two biggest warehouse clubs - Sam's Club and Costco - to determine which one best deserves consumers' membership dollars. The result: The deals are great day in and day out from both, but there are differences that can guide people's choice if they haven't joined, or lead them to switch clubs.

CR's findings - based on data from reader surveys, expert interviews, its own shopping at both clubs, and price comparisons with competitors - revealed several pros and cons for both clubs. Among them: Readers gave higher overall scores to Costco for groceries, electronics, small appliances and eyeglasses. Sam's Club's return policies for electronics are rated more generous; at Sam's customers have six months to return a computer and can return anything else anytime. At Costco, customers have 90 days to return most electronics and can return anything else anytime.

"Both have strengths and weaknesses, but the bottom line with a warehouse club is that they can be worthwhile even if you're not necessarily buying for a business or a large family," said Tod Marks, Senior Editor at Consumer Reports. "The beauty of shopping at the clubs is not having to wait for a sale, because everything is sold at really good prices every day, unlike your local supermarket, where only specific items are on sale."

How they differ

Although to some, Sam's Club and Costco might seem like clones, there are differences that can guide which one better deserves your membership ($40-$100 per year.)

Costco has fewer stores than Sam's Club and they tend to be in more affluent locations, with higher income shoppers and fancier merchandise like $100 designer jeans, specialty foods and brands like Kenneth Cole and Ralph Lauren. But that doesn't mean Sam's Club is frumpy. Besides jewelry and designer items, you'll see merchandise from Apple, Sony, and Bose.

Each club offers goods under its own labels that sell for significantly less than name brand competitors; Costco offers 330 items from its signature Kirkland line, while Sam's Club offers 400 items from its Members Mark line.

Sam's Club has more shopping hours reserved for business members than Costco, as well as a broader selection of products geared toward commercial customers, including restaurant and food service equipment.

Based on the stores CR visited, Sam's Club had better signage with billboards at the head of each aisle making it easy to locate products.

If you control the urge to splurge, club membership can pay off. Among the tips offered in the May 2007 issue of CR, customers should stick to a list, and compare club prices for big-ticket items to those of other retailers by going online to sites such as PriceGrabber.com and BizRate.

To read more about the results of the Costco vs. Sam's Club comparisons, the May 2007 issue of Consumer Reports is available wherever magazines are sold. The report will also be available to subscribers of www.ConsumerReports.org.