The Costco Effect: Buy Cheap, Spend (and Eat) More

Sure, warehouse stores are cheap: one exec says Costco marks up product at around 10%, compared to 20% at normal supermarkets. But, Neal Templin wonders in the Wall Street Journal, do bulk purchases actually save you money? “When there are more bagels in my refrigerator, I consume more of them,” he writes. “I think that's human nature. Call it the Costco Effect.”

The more you buy, particularly with perishables, the more goes into the trash. Templin understands that “people are often price-sensitive about an initial purchase. But after the money has been spent, there's a tendency to view the stash—be it a pile of bagels or imported stout—as manna from heaven.” So not only does a bargain buyer get fat, but the perceived savings evaporate. (More Costco stories.)