As the Consumer Price Index rises to a new 40-year high of 8.6% and gas prices rise to an average of $5 per gallon nationwide, people are starting to flock to warehouse and deep discount outlets to try to make ends meet.
Business Insider reported Saturday that membership sales are significantly up at stores like Sam’s Club, BJ’s, and Costco, and that other deep-discount outlets like ALDI are also having a good year.
According to the report, Placer.ai, which tracks foot traffic at these outlets, is reporting an increase in visits of between 3.5% to 6.1% over 2019 pre-pandemic levels.
"While numbers are down slightly year over year, this trend is likely driven by the aforementioned orientation towards bulk buying, which drives larger basket sizes off of fewer overall trips," Placer.ai VP of Marketing Ethan Chernofsky told Insider.
Outlets like Costco and Sam’s Club, which charge annual membership fees, were found to have lower grocery prices than other retailers, keeping inflation on groceries at those locations between 6.9% to 8.2%, below the 8.6% CPI national average, and were offering gas as much as 30 cents per gallon lower than other gas stations in their areas.
The report said that the savings in fuel costs alone can more than make up for the annual membership price to get the discounts.
In the case of Costco, Insider reported the company with 116.6 million members, bringing in $984 million in revenue in the third quarter of fiscal year 2022, increased sales of 16.3%, and renewals at a record high of 90%.
The company’s website lists three categories of memberships, executive for $120 per year ($60 membership fee and a $60 upgrade), business for $60 per year which allows purchases for resale, and a gold star membership for $60 per year.
The story at Walmart-owned Sam’s Club is a similar one, according to the report, with quarterly sales in 2022 up 10% over the previous year, and another 10% increase in the income from memberships sold at that chain.
BJ’s saw an increase in sales during the period of 14.4%. The warehouse club also had a 12% increase in membership sales, generating more than $96 million in revenue, the chain told Insider.
The U.S. Bureau of Labor Statistics reported Friday that the CPI rose 0.3% in April, rising to the 40-year 12-month high of 8.6%, fueled by increases in the cost of energy, food, and shelter.
According to the agency, energy costs rose 3.9% month over month, with the gasoline index increasing by 4.1%. Food prices rose 1.2% from April.
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