Gen Z has discovered a clever trick to combat higher prices by turning to big box stores that sell items in bulk and splitting them up among their friends.
Shoppers in their 20s and 30s without children are also battling inflation and turning to big-box retail giants like Costco and Sam’s Club to stretch their grocery budgets.
Walmart-owned Sam’s Club is seeing explosive growth among its youngest members. A recent surge has seen Gen Z shoppers (ages 27 and younger) lead the pack, with an impressive 63% increase in memberships over the past two years, the website reports. Wall Street Journal.
This younger generation, along with millennials (ages 28-43), now represents a significant portion of Sam’s Club members, reaching a quarter of its total base.
The rise in Gen Z membership can be attributed to two factors, according to Rupesh Parikh, a senior analyst at Oppenheimer.
Gen Z has discovered a clever trick to combat higher prices by turning to big box stores that sell items in bulk and splitting them up among their friends.
Shoppers in their 20s and 30s without families are battling inflation and turning to big-box retail giants like Costco and Sam’s Club to stretch their grocery budgets.
For starters, it coincides with Generation Z entering adulthood and establishing their own homes.
Secondly, these young shoppers are attracted by the cost savings that come with buying in bulk. They see large quantities, such as those huge boxes of tomato sauce and giant packages of chicken, as an opportunity to split the expense with roommates, friends or family members.
A recent survey of more than 1,000 people by market research firm Advantage Solutions found that nearly 40% of respondents, ages 25 to 34, reported sharing their bulk grocery purchases with others.
And Gen Z isn’t the only one who shops this way: One-third of those surveyed reported splitting up their bulk purchases.
Walmart-owned Sam’s Club is experiencing explosive growth among its youngest members
Food prices may be easing slightly from their peaks in 2022 and 2023, but Americans are still feeling the pinch at the checkout.
In fact, consumers are spending an average of 11.2% of their disposable income on food, according to the latest data from the Department of Agriculture, reflecting the persistent impact of inflation.
While wholesale clubs like Costco and Sam’s Club are reporting increases in net sales this year, they don’t advocate having members share their memberships to take advantage of the benefits.
Both stores are implementing measures to limit the number of guests, and Costco is even conducting ID checks.
To overcome the membership fee barrier, some young shoppers, like Andrew Watson and his roommates, share memberships.
While wholesale clubs like Costco and Sam’s Club are reporting increases in net sales this year, they don’t advocate members sharing their memberships to exploit the benefits.
Watson, a pre-med student, told the WSJ that he splits the cost with his roommates, allowing them to stock up on staples like chicken breasts at a discounted price.
“We get together as a house every day. It really helps us stay cohesive,” Watson said. “Buying in bulk is a no-brainer.”
The practice extends beyond student housing. Autumn Lucy, a tech worker, told the WSJ that she uses her mother’s membership to shop in bulk with her sister.
However, bulk purchasing with shared memberships is not without its drawbacks. Devak Nanda, a recent graduate, told the WSJ that he discovered the limitations firsthand.
Long walks to Costco, limited storage space in her apartment, and the pressure to consume large quantities before they spoiled became disadvantages.
To overcome the membership fee barrier, some young buyers share memberships with friends and family.
Nanda even resorted to creating a spreadsheet to track her expenses, but ultimately revealed that the savings weren’t significant enough to justify the hassle.
“My first little friction was that basically everything you buy, especially if you’re someone who cooks, is what you’re going to eat for a while,” Nanda said. “That gets pretty boring.”
He jokingly admits that the only real benefit was the store’s famous $1.50 hot dog and soda deal.