Nov 3, 2025
Warehouse clubs are having a moment. Shares of Costco and BJ’s have outperformed other retail stocks in recent years, reflecting the outsized success of the club model. Food prices surged after the pandemic, and even as headline inflation cooled, grocery inflation has lingered, pushing shoppers to stretch paychecks and seek lower prices. This has set the stage for a new generation of bargain shoppers.
The U.S. Department of Agriculture (USDA) still shows food prices running above year-earlier levels in mid-2025, and the Bureau of Labor Statistics’ data confirms that food costs climbed materially through 2022 and 2023. That backdrop helped clubs turn their scale, private label brands and membership fees into a pricing edge that resonated with value hunters.
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Who are these cost-conscious buyers taking up all the parking spaces at warehouse stores?
There are still plenty of older folks on tight budgets who purchase in bulk, but Costco’s third quarter earnings update notes an influx of younger members (1), and the Wall Street Journal recently reported that at Sam’s Clubs memberships for shoppers ages 27 and under rose 63% over the last two fiscal years making Gen Z and millennials a quarter of of all club members (2).
As Rupesh Parikh, an equity analyst quoted by WSJ says, Gen Z is drawn to lower per-unit food prices, and research shows that almost 40% of shoppers between 25 and 34 split bulk groceries with roommates, neighbors, friends and family.
Warehouse stores add digital convenience to discount prices
Warehouse clubs are leaning into Gen Z and millennial demand for value and speed. Sam’s Club says nearly half of new member growth comes from Gen Z and millennials, and about a third of in-club shoppers engage with its app regularly (3). The digital playbook is built around making the shopping experience more convenient for budget-stretched shoppers. Scan-and-go checkout, app-based lists, curbside pickup and AI-assisted exits help members make faster trips and avoid lines.
Food prices marching higher for the fifth year in a row has kept consumers who have come of age in this environment focused on prices and monitoring what goes in their shopping baskets. The refocusing of demand is in turn shaping corporate growth plans.
Sam’s Club has outlined a multiyear push to open roughly 15 clubs a year and modernize its entire fleet for higher digital throughput (4), while BJ’s plans 25 to 30 new clubs over two fiscal years to widen its footprint (5). Costco continues to open new locations and report rising membership, helped by younger digital sign-ups (6).
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The math that makes warehouse clubs worth it
Your potential savings depend on how the club model works.
The average household would spend $993.80 on groceries in April, 2025 on a "thrifty food plan," according to the USDA, so modest percentage savings month-over-month can add up over the course of the year. Clubs like Costco keep the kinds of goods they carry in a tight range to price bulk packs and their private-label brands aggressively. If you are buying nonperishables in bulk, you stand to save quite a bit.
Whether or not that means you save money overall, depends on a couple of different factors. The first factor is the annual fee.
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As of 2025, entry tiers cost $65 at Costco, $50 at Sam’s Club, and $60 at BJ’s, while premium tiers run $110 to $130. To break even, your yearly savings need to exceed that fee. A $60 fee works out to $5 a month, so even small unit-price wins on staples can cover the cost if you shop regularly.
Household size and waste are the swing factors.
Families and roommates who cook often can spread bulk sizes with less spoilage, while singles may see savings eroded if perishables expire. Food waste is a real cost in the United States, where losses are estimated around 30% to 40% of the food supply, according to the USDA, and new Environmental Protection Agency (EPA) research puts the consumer cost of waste in the hundreds of dollars per person each year.
Tips to get the most from warehouse clubs:
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Set a grocery list before you go and stick to it to avoid impulse buys.
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Compare unit prices in the app in advance, and favor shelf-stable or freezable staples once you’re in-club.
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Split bulk packs with family, friends or roommates to raise consumption and cut waste.
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Freeze meat and bread in meal-size portions to extend freshness and protect savings.
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Track what you throw away because reducing waste is a direct way to save money.
Warehouse clubs can be an effective tool against high grocery costs when your household size, cooking habits and discipline align with bulk purchasing. But they are not a universal bargain, so the best hack is matching membership to realistic consumption.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Seeking Alpha (1): Wall Street Journal (2); Retail Dive (3); Retail Dive (4); BJ’s Wholesale Club (5); CNBC (6)
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Will Kenton is a personal finance writer with a Master's degree in Economics who has been published in Investopedia, AP News, TIME Stamped and Business Insider among other publications.
