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For Warehouse Clubs, the Price is Still Right

Warehouse clubs are continuing to attract customers with their price, according to a study from HSA Consulting, reported Progressive Grocer (March 29).

When comparing retail prices for 97 perishable, dry grocery and sundry items in 19 categories in Miami, FL, Costco was the least expensive overall, and the top three club chains’ average prices were 24% cheaper than Walmart and Amazon, and more than 53% cheaper than Publix Super Markets for dry groceries and sundries. The price gap widened even further when perishables were added, the study found.

Club bulk-pack pricing and supermarket loyalty card prices both affected the study results, but no allowance was made for premium club member “cash back,” which would further reduce club prices by 1% to 2%, according to HSA Consulting.

In spite of competition, warehouse clubs have grown faster than overall U.S. retail sales. In fact, consumers will commonly hold both a warehouse membership and a Prime membership, but rarely two warehouse memberships, the study found.

But are warehouse clubs well placed to compete with Amazon? Many factors point to yes.

For the full story, go to this week’s Food Institute Report.