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Walmart, Whole Foods, Sam’s Club, and Costco
From Priceonomics
, a survey on where people spend their grocery money and how much cash they drop doing it:
Our curiosity about grocery shopping bills inspired us to analyze data on the the typical amount spent at the most popular stores in the United States. For this analysis, we used data from Perfect Price, a company that maintains a database of billions of credit card transactions. This data allowed us to understand exactly how much people spend when they go to different stores.
What they discovered is that people spend the most at Costco, followed closely by Sam’s Club. This makes sense, I guess: when you go to those places you’re there to shop. Everything is giant-sized and stacked on pallets. People spend, on average, $136 per Costco visit and $81 at Sam’s Club.
But it gets interesting when they start comparing two very different stores, Walmart and Whole Foods:
The distribution of spending at Whole Foods and Walmart — stores that are diametrically opposed in the cultural imagination — are actually quite similar in terms of the distribution of spend. Slightly more people spend less than $25 on a trip to Whole Foods, and slightly more spend between $25-$100 at Walmart, but overall, the distribution of how much people spend on trips to these stores are remarkably alike.
Of course, for the same amount you probably get a lot more in your cart at Walmart than you do at Whole Foods. But this still surprises me a bit. I’d have expected Whole Foods shoppers to spend a lot more than Walmart shoppers per visit. What am I missing?
Published in Culture
Speculation fueled by personal anecdote, but might the (delicious) food courts at Whole Foods drive the average down? I don’t have a Whole Foods near me, but — whenever I go there — it’s usually to eat.
Alternately, maybe it’s people who occasionally go there for speciality items?
With Whole Foods, they’re forgetting to include the dollar value of the smugness they also pick up.
Family size must be considered. Judging by the number of rug-rats trailing behind the carts at Wal-Mart, they are shopping for a larger family.
This is not mysterious. At places like Walmart or regular grocery stores, I stock up on pantry basics and I only do so every few weeks or even once a month. Places like Whole Foods, or in this area, Byerly’s, are for the quick stop to get something fresh and good that has to be used quickly. Just a few specific ingredients for specific meals that finish what I have in the pantry. Specialty stores are also smaller so they are a quicker stop. I would never ever go to Sam’s Club for one ingredient because it’s too much work.
We call Whole Foods , Whole Paycheck here in the Low Country.
Many of the mainstream grocery stores have picked up on what appeals about Whole Foods. My local Publix has tons of fresh, organic, etc. products, and they do it well. These days, I make an occasional trip to Whole Foods for items I can’t get anywhere else. I can get most of the stuff I used to get at Whole Foods elsewhere, and for lower prices.
Our local Whole Foods is in the next shopping center up from Trader Joe’s. Why spend $25 on an orchid at WF when I can get the same one for $9.99 at TJ’s?
Exactly. I don’t think the kind of data presented in the study is all that helpful. You really need to know what things people are buying, and where, to draw any meaningful conclusions. So you’d have to break down the information by purchaser and by product purchased, to get a better picture of what each person buys where.
Hopefully, they can’t do that with the aggregated data that’s apparently available.
You are missing frequency of visits. We are SAMs shoppers. We tend to go about once a month and stock up then back again in 4-6 weeks. The Walmart and Whole food shoppers I know tend to go one or two times a day get what they need that day or the next then back again.
They’re not all the same. I can’t speak for Costco, because we don’t have them, but we buy different things at different markets.
For example, this past weekend, my bride hit three different super markets: Walmart, Price Rite, and BJ’s.
She buys different things at different places. For specialty items, you need to go to a higher end grocery store.
I suspect that’s why people spend small amounts at Whole Foods. You go there to get one or two items you can’t get at a lower end grocery store. BJ’s and Sam’s are for bulk. Walmart is for common cheaper stuff that you can’t get anywhere
Our grocery shopping is one big trip (Sam’s Club) the day after I am paid for the month for all items that can be bought in mass (cereal, breakfast items, eggs, chicken, paper towels, etc…) and then one trip per week to the local version of Aldi’s (Cash Saver in south Mississippi) for all the small items based upon the menu for that week and for fruits/veggies/bread, though we just bought a deep freezer so that might change a bit.
I thought one was required to spend at least $400 on a trip to Costco. I have to read the rules again.
We shop for bulk items at Costco and BJs every few weeks, and never spend less than $250 a trip. Sometimes twice that.
All other food shopping happens at local stores – I hit up Giant once a week for its loss leaders and amazing gas deals. Otherwise, I go to a kosher supermarket, and a local fruit/veg store that happens to sell super produce at great prices, though its main purpose is laundering money for the Russian mob.
We also buy bulk staples like flour and chocolate chips at a restaurant supply house. Cheaper and better than Costco. Did I mention that I am Jewish?
I have not yet walked into Whole Foods.
What about people who pay cash?
Or use EBT?
Whole Foods shoppers buy less because there are only so many groceries one can stuff into a Prius.
Costco is different than even Sam’s club. The best things to buy at Costco are expensive items because Costco has the same mark-up on everything from ketchup to high end TV’s. That means that although people spend more per Costco trip you tend to get great value.
Nailed it. I go to Whole Foods only when I’m looking for something special like meat for a big holiday celebration with family or my favorite cheese, Red Dragon.
Yes, I am pretentious enough to have a favorite cheese.
Everything else I get in bulk at Wal-Mart or at a regular grocery store.
Maybe I should edit that, because Costco has a fixed mark up on all items some things are dramatically cheaper at Costco while other items are more expensive.
iWe- “Did I mention that I am Jewish?”
Dude, dude, dude (shakes head). Frugal isn’t limited to the Tribe. We shop for staples at Aldi’s, meat at Price Less (an IGA off shoot) or Krogers and fruits and vegetables at all three, depending on who has what on sale. Bread and dairy are Kroger and Price Less, again depending on sales. Aldi’s is on the way home from work, and the other two are close to home.
Or carry on public transportation.
You VILL ryde zee trainzzzz
I’m the one bringing the average down. There’s one right down the street from work, so I pop in there over lunch once or twice a week, average expense $20. I never manage to run out of breakfast protein bars, microwavable lunches, Diet Coke, and cat litter at the same time … and of course while I’m there I scope out the clothes and the household goods and the Blurays …
The only reason I goto whole foods is for a pound of sesame seeds for making my own tahini.
It’s analogous to, in my youth, going to the supermarket vs. going to the delicatessen. You get 95% of what you need at the supermarket and just a few really good things at the deli that are available at the supermarket but of inferior quality. You wouldn’t buy your lox, whitefish, and bagels at the supermarket, for example.
Exactly. Whole Foods, Trader Joes, and failed ventures like Fresh N Easy were/are niche markets appealing to a niche market. If I want to stock up for my family of four, I go to Wal-Mart, Target or Publix, because ground beef is ground beef and Cheerios are Cheerios, no matter where you buy them.
If I want that killer gourmet sausage or some fresh basil, I bip into Whole Foods, laugh at the hipsters, and leave.
When a new Walmart opened up nearby several years ago, we immediately started to grocery shop there. But after several weeks we noticed that not only wasn’t it the lowest cost choice but that we spent too much time there looking for items and waiting in line. There were too few checkers (a familiar lament for those who shop at Walmart) and health/beauty plus pet food are located on the opposite side of the store from groceries. Time is money, at least to us. We went back to our local Price Chopper. I rarely go to Walmart now.
As for Costco or Sam’s Club, we do go there but infrequently. There is just two of us at home now and we don’t need to buy in bulk. Whole Foods is located 45 minutes from our house. I can buy the same items at a much lower cost at my neighborhood store.
Perhaps the knowledge that things are cheaper at Costco leads people to spend more there, to not be as careful as they would in a store they know to be expensive. It’s been observed that when people buy the fat-free cookies or chips, they eat far more of these than they would eat of regular cookies and chips, as if ‘fat free’ gives them license to throw caution to the wind. But predictably, these people gained weight …and probably had tummy issues as well :( Perhaps the same thing is at play here.
…by the way, the ‘bulk’ item aspect may not always be as good a deal as it sounds. My boss, with 3 teenagers at home (seems like a good candidate for Costco, yes?), jokes about the ‘life time’ supplies of things he has at home!
I think that’s likely. I do most of my shopping at the nearby, inexpensive grocery, but I can’t get everything there. What I can’t get there I can find at the much more expensive grocery a bit farther away.
We spend a bit more time and money at Wegman’s and Whole Foods now, largely because it’s easier to find good “no salt added” foods. However, the Big Y and Stop and Shop are catching up. The clubs aren’t nearly as good on this front.
You shop at Whole Foods for the day, Wal-Mart for the next two weeks, Sam’s Club for the month. You just don’t stop in a normal or high-end grocery store for that 72 pack of toilet paper.
To pick up on Lily Bart’s comment, I quit on the club stores because we (me, wife, 3 kids) tended to pig-out on what we bought in bulk. We’d buy a case of pudding cups, eat 3 a day for a week, and then they were gone. And who has room for that giant thing of mayonnaise?