There’s a website called Cheapism.com that does consumer reviews geared toward getting the best value for money. They claim that they are the only review site that focuses exclusively on low-price products, a part of the market they say is often overlooked by experts. So, this week they published a report on their comparison between Sam’s Club and Costco. In the end, they decided that Sam’s Club was somewhat better than Costco. But of course, as you can all guess, I don’t agree with that. And I don’t even necessarily agree with that based on their own data.
One of my biggest gripes with their comparison starts with what is definitely the easiest direct comparison: prices. They compared the prices from the two stores when purchasing a variety of items for a family of four. Overall, they came out spending less at Sam’s Club by $12.00 ($215.65 at Sam’s vs. $227.08 at Costco). So, you’d think that was pretty cut and dried and apparently they did too because they gave the pricing win to Sam’s Club. However, it turns out that Costco is actually cheaper by 3.6% on the actual cost when compared on a per unit basis. So, what that says to me is that Costco is actually less. Does it not say that to you too? If Costco is cheaper on the per unit cost, but costs more overall, that just means that when you are buying at Costco you are getting slightly larger quantities than at Sam’s Club. Therefore, their pricing win to Sam’s Club is a false victory. You’ll have to buy those items (or at least some of them) more often if you shop at Sam’s Club, thus spending more over the course of a year. That doesn’t seem like a good thing to me.
Using their own comparison table, they show that Costco is the less expensive option by 3.6%, but then in the actual text of the article and the verdict table they contradict this finding by saying that Sam’s Club is cheaper. Huh? No, the price is not cheaper overall at Sam’s Club, you just weren’t buying as much stuff. For instance, in a hypothetical situation, if you buy a 10 ounce jar of peanut butter at Sam’s Club for $2.00 and the 16 ounce jar of peanut butter at Costco for $2.50, then Sam’s Club is not cheaper for peanut butter because you are paying more for that smaller quantity. You are paying $0.20 per ounce at Sam’s instead of $0.16 per ounce at Costco. And you’re going to run out of peanut butter faster if you buy it from Sam’s. But that isn’t what Cheapism.com would say, they would say Sam’s is cheaper because you only had to pay $2.00 to get some peanut butter. They also have this statement about buying more manageable sizes at Sam’s Club, which seems to me like they are just trying to add credence to their odd price comparison verdict.
I would encourage anyone really interested in a price comparison between these two stores to really look at the Cheapism.com comparison table. You need to really study it item by item for the differences in prices and quantities, as well as brands. I think this tells a different picture than what you will find in the text and verdict table for the Cheapism.com comparison.
I was really interested to read this comparison since I’ve never done a whole lot of shopping at Sam’s Club, but when I did, I didn’t find the quality of products to be anywhere near the same. I was hoping that they would do a considered comparison, including a bit of an evaluation of quality differences between the two store brands in particular. Unfortunately, they didn’t mention quality at all. And really, in my mind you can’t compare two items of varying qualities and act like that is a direct comparison. There are ways to be less subjective about quality too (though usually you can just ‘see’ the difference) by using label information or nutritional information on food items. But they just compared the store brands without a mention of quality. And that makes me sad. Mostly it makes me sad because part of getting good value (which is what they claim they are about) is quality. They could have at least mentioned it because I know that there are definitely some areas where there are enormous differences in quality of products. I’ve heard people mention that over and over about things at Sam’s Club: lack of quality. It’s the same as at Wal-mart, there is a lesser quality sold for their prices. Really, they should have at least covered a little something about that because that is the number one reason I hear people give for why they shop at Costco rather than Sam’s Club.
I don’t shop at Sam’s Club on a regular basis, and haven’t even shopped there at all in a few years, but the general feeling on the Internet and from everyone I know that shops at both stores, says that Sam’s Club is about cheapness, and Costco is about quality. A lot of reviews and personal opinions I have gotten actually say Costco has the better value for a consumer because they offer quality goods for exceptional prices. This would have been an excellent opportunity for Cheapism.com to disprove that theory. However, maybe they didn’t discuss quality because they, like Sam’s Club, really are all about cheap and have no consideration for quality. I think they missed an opportunity here to really do a meaningful comparison on the value that both stores offer, that means an emphasis on both price and quality.
Their comparison of services was hit or miss too. For instance, they claim that Costco doesn’t sell contact lenses. Strange because I’ve bought mine there for years and can easily find them, with big giant prices, in the glass wall cabinet right by the eyeglasses. How did they miss them? Maybe it’s because they had gotten their glasses at Sam’s Club. Don’t know, but they say they never even saw them.
Then there’s the electronics, where the prices don’t differ all that much but they say Sam’s is better because they have an extra year of warranty and offer technical assistance which they claim Costco does not offer. However, all over any Costco store’s electronics area you will find the signs and brochures talking about their technical concierge services, as well as their second year of warranty for free. If they missed the big obvious things like that, what other things are they missing or leaving out of their review? One of the big things they’re missing is that the Sam’s Club extra year of warranty is apparently only available to Advantage Plus or Business Plus ($100 membership) members. Whereas at Costco, everyone who purchases a computer, television or projector gets the extra year of warranty, no matter your membership level.
Also, I don’t think they were giving any credit to Costco for their added value deals that they often have with electronics and kitchen electrics. For instance, I know that when you buy a camera at Costco a lot of times you get extra things like memory cards, cases, extra batteries or cables, in any case, not just the camera. Does Sam’s do that same thing? They mention a camera that Sam’s has for $10.00 less, but mention nothing about getting an SD card in the deal at Costco. From looking online, I can see that the camera they compared, Canon Powershot SD4500, comes with a 4GB Class 6 SD card at Costco, but does not come with one at Sam’s Club. And at Sam’s Club it is going to cost you another $15.00 – $20.00 to get a similarly sized class 6 SD card . So, in the end, you’re paying more at Sam’s Club for the same camera and a comparable memory card. Well, that pretty much wipes out the Sam’s Club advantage, doesn’t it?
Then they talk about the pharmacy services but leave stuff out too. They mention that there are some $4/$10 generic prescriptions at Sam’s Club and how they have a member prescription plan. But from what I read online you have to have the Advantage Plus membership to get the discounts on prescriptions or the $4/$10 generic prescriptions. They also don’t mention that Costco also has a prescription plan for members. Or, how the two plans might differ. Nor do they do a direct price comparison for any actual prescription medications. It does look like if you get one of the generic versions that is on their $4/$10 prescription list, then you would come out ahead at Sam’s Club though I didn’t do an exhaustive comparison of the lists. I’ve never done a pharmacy comparison with Sam’s Club, but I have done a direct comparison with Wal-mart. Costco was the winner in a big way for my particular set of prescription drugs, so I say that Costco’s pharmacy is better and I have actual numbers to prove it. But seriously, this is really going to depend on your prescriptions and to some extent your insurance situation too.
The other thing I didn’t like was that they included snippets of reviews from various online sites about the two stores. But that seems a bit contrived and gives too much room for things to be taken out of context. If they had used the broad ratings generalizations that these types of review sites usually give (four stars out of five, or an 87% favorable rating), then that would have been better and more useful. But finding one positive or negative thing that someone wrote in a review isn’t all that helpful to me. We all know that there are people that have had bad experiences just about anywhere and we all know that there are people that just absolutely love someplace. However, if the majority of people love or hate someplace that is more telling and useful.
They also do a little comparison, or their version of one anyway, of the membership prices. Again they say Sam’s is better because their price is lower and they have more in-store benefits. Of course, they never do list all in-store benefits for each store, but then they seem to not know half of the ones for Costco, so I guess the list wouldn’t necessarily be that helpful anyway. But they also don’t point out that Costco has a lot of external partner service benefits. Does Sam’s Club? I don’t know. Nor do they mention anything about the 2% cash back at the Costco $100 membership level. Does the Sam’s Club $100 membership level have the same benefit? From what I’ve read online, it doesn’t seem like Sam’s Club has the same kind of cash back deal for their upper level memberships.
So, all in all, I’m a little disappointed by this comparison of Costco and Sam’s Club. I think they could have been more thorough and certainly could have done a far better job on research before they published this comparison. I found a lot of information online, from here in the UK, so why couldn’t they have done that? I didn’t even have to spend that long looking things up and I could see that there were discrepancies and issues with the information that included in their article.
Cheapism.com says that they are about value but in reality it appears that they are more concerned with cheapness: how little can I pay to bring something home once. They don’t appear to be concerned with how long that product will last or how many times will I have to go buy more. And I guess that is why they don’t mention quality in their comparison, and also why they don’t place more emphasis on the fact that Costco was cheaper on unit price. They are just looking at how cheaply they could buy their set of items, not how long those items will last, whether that is because the items break or because they have fewer servings. Either way, they were not really looking at the value of these stores or memberships to me, just about how much they would spend right now to get some stuff but not the same amount of stuff.
What do you think? Fair comparison or are there issues? Am I being too in love with Costco? Are there other issues with their comparison that I didn’t even consider? Where do you stand on the Sam’s vs. Costco thing? And yes, you fans of BJ’s, why didn’t they include them in their comparison too?
Read the whole comparison: