High Prices Have Made Bulk Buying Cool Again

Wild for Warehouses

Young Americans are flocking to Costco (COST) — and not just for its famous $1.50 hot dog and soda combo.

Faced with some of the highest food costs of their lifetimes, younger consumers are turning to big-box warehouse clubs including Costco, BJ’s Wholesale Club (BJ), or Walmart-subsidiary Sam’s Club (WMT) to help lower their costs and buy in bulk.

Bulking Up

In the past two fiscal years, Sam’s Club saw a 63% rise in memberships for people 27 and under, a company spokesperson told the Wall Street Journal. It’s perhaps not surprising that Americans are trying to save on their grocery bills, after all, they’re spending a higher percentage of their incomes on food than they have in three decades, per USDA data.

But buying in bulk isn’t free. Basic memberships run around the $50-$60 mark per year, and making use of them necessitates the journey to a wholesale store of which there may be fewer close by. Nearly half of all shoppers in the age group of 25 to 34 split memberships with family, friends, or roommates, according to a June survey by Advantage Solutions cited by WSJ.

Officially, wholesalers frown upon sharing memberships, but if there has been a rise in under-the-table subscription-splitting, it hasn’t been bad for their bottom lines. Both Costco and Sam’s Club have seen net sales rise this year.

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