STUART, Fla. — As Costco prepares to open this Friday in Stuart, WPTV has been examining all the ways the wholesale store could impact life in the area. One of those impacts could be to your wallet.
Exactly one week before Costco’s scheduled opening in Stuart, neighbors were signing up for memberships outside the new store.
“It’s been a long time coming!” said Carol Anderson, a new Costco member. “We love the volume you can get.”
WATCH: Economics professor Art Carden explains how increases in grocery prices among competitors
Harriet Jackson, like many of her fellow shoppers who stopped to talk to WPTV, said she was eager to benefit from the lower gas prices at Costco.
However, as a group of economists found, savings that come with buying in bulk at Costco could cost you elsewhere.
Art Carden is a distinguished professor of economics at Samford University. He and his colleagues studied grocery price data in areas where Costco entered the market.
“Costco actually leads to slight increases in grocery prices among competitors,” Carden told WPTV in an interview.
Carden’s study found long-term grocery price increases of roughly 2.7% after Costco’s arrival, and that the impact was more noticeable in cities with smaller populations and a higher grocery store density.
"It is a little bit counterintuitive,” Carden said. “The effect of Walmart on incumbent retailers has tended to be for prices to go down.”
Through his research, Carden was able to understand why Costco’s effect on prices was different from Walmart’s during the big box boom of the 1990s and 2000s, and while smaller retailers cut prices to compete with Walmart’s bargains, Costco’s offerings do not directly compete with those of traditional grocery stores.
“People who really put a huge value on low price, they can shop at Costco,” Carden said. “And people who put a value on convenience, they tend to shop at other stores.”
Some shoppers said they would spend less time at the grocery store once Costco opens.
“I’ll buy more in bulk to save money," Darlene Young said.
Others, like Steve Lapekas, said they'll make time to shop at both.
“The things that I would normally buy (at the grocery store) I probably wouldn’t normally buy at Costco, because it’s bulk,” Lapekas said. “And it would go to waste before I would be able to use it all.”
Many shoppers said they were drawn to the lower gas prices at Costco.
While Carden did not study the impact of Costco on gas prices, he believes the impact would be similar to grocery prices.
Carden pointed to the concept of how people are willing to pay for things: with their time or with their money. While some might be willing to wait in a longer line to save 20 cents per gallon on gas, others would rather pay a little extra for the convenience of the nearest gas station—perhaps with less or a wait at the pump.
