Sep 30, 2011 127 comments

Is a Costco Membership Worth The Cost?

Last week, I had a chance to indulge my usually suppressed Consumer Instinct and buy a WHOLE BUNCH OF STUFF at Costco.

The nearest outlet of that chain is about 20 miles away from my house, in a mostly-sprawl area called Superior, Colorado. If you know Mr. Money Mustache at all, you know that I would never drive that far just for a shopping trip, so I always wait until I have other business in the towns nearby such as Boulder. As a result, I usually get to Costco about once every 3-6 months, and when I do, I acquire a hatchback-busting $400 load of groceries and any other necessities that happen to be available at unusually low prices at the time.

A Costco membership costs $50 per year. And expanding a nearby errand does still add some extra driving to my trip – which would not otherwise be necessary since I get all my other groceries using a bike trailer. Am I fooling myself with this membership, or is it actually a good investment of my time and money?

To find out, I have conducted a Top-Secret Multi-Store, Inter-City Investigation – just for you.

I walked through endless aisles, took candid photos on my telephone, jotted down notes on scraps of paper, and then spent countless minutes typing all of the results into a spreadsheet to figure out The Real Deal.

SO NOW.. let’s go line by line through my latest Costco receipt, and compare the cost for equivalent food from my local Safeway. You can see all of my purchases, judge for yourself whether or not they are practical or silly, and at the end we’ll see how much I saved or wasted on the trip.

Item	Costco Cost	Safeway Cost	Costco Savings
TOTAL	401.48	690.67	283.16
Quaker Oats - 30 lbs in the form of 3 10lb boxes	20.67	45.00 (and this happened to be during a major sale)	24.33
Toilet Paper (100% recycled) - 32 double rolls	14.69	17.33 (but no recycled TP available)	2.64
Blackened Wild Salmon Filets - Frozen - 2.25lb	15.99	29.97	13.98
Organic espresso roast coffee - 4 bags totaling 9 lbs	48.00	75.96 (that was the cheapest wholebean coffee in Safeway. For equivalent quality, more like $100+!	27.96
18 organic eggs	3.69	5.98	2.30
3 lb organic beef burger patties	15.99	23.97	7.98
2 lb Kalamata Olives, fancy	6.79	11.97	5.18
4lbs frozen mixed blueberries/raspberries	10.99	19.20	8.21
2lb sliced various kinds of cheese (party style)	8.99	12.00	3
8.5 lbs (4 x 2.1lb bags) Quaker Natural Granola	15.98	21.80	5.83
300 generic-version-of-flintstone kid vitamins	12.99	17.50 (happened to be 2-for-1, normal price is double this)	4.51
32 oz pure maple syrup	12.99	19.99	7
4 lb thick sliced smoked bacon	14.99	19.96	4.97
2 lbs roma tomatoes	3.99	3.99	0
16 dry erase whiteboard markers (for our little artist)	9.99	16.00 (Staples price)	6
3 lbs Boulder natural sausages	7.19	18.83	11.63
6lbs Whey protein powder (for the weightlifters in the family, also supplements protein for fussy eating boy)	39.99	59.99	20
3 lbs Coleman organic chicken breast	18.45	23.97	5.52
2lbs colby jack marble cheese	5.99	7.99	2
2.4lbs smokehouse roasted almonds	8.99	19.18	10.19
9 lbs (!) raw unsalted almonds	29.37	45.00	15.63
1.13 kg organic tortilla chips	4.39	12.00	7.61
5 lbs shredded mozarella cheese for pizzas	12.99	20	7
4 pack men’s merino wool hiking socks	10.99	17.00 (target price)	6.00
16oz pure vanilla extract	6.89	19.98	13.09
3 lb Pico de gallo salsa, fresh	5.49	no yumminess equivalent, closest is Newman’s Own at 2.69/lb = 8.07	2.58
2 lbs smoked turkey slices, fancypants	11.99	15.98	3.99
303 grams ground cinnamon	2.65	9.00 (6 x 50g containers, on sale)	6.35
3.5lbs dark bittersweet chocolate chips (70% cacao)	9.79	13.95	4.16
2 lbs active dry yeast (for bread and pizza making)	4.15	43.12 (5.39 for a 4-oz jar!? what the fuck, safeway?)	38.97
32oz extra virgin olive oil	5.44	15.99	10.55

I’m calculating this for the first time as I write the blog posting, so my first reaction is Holy Shit! My Costco habit is even more useful than I had been assuming!

Comparing the $401 Costco bill to a potential $690 Safeway bill means that I am saving 41% over the lowest prices I could find at Safeway – and this is over a huge swath of groceries. After subtracting the membership cost, I probably still save close to $1000 per year.

All of these things are food that we actually eat, and use up completely, so there is no need to factor in waste. I’ve been buying basically the same staples for years. The exact list varies slightly, as some of my staples hadn’t run out yet and thus do not appear on this list, and some of the things I bought this week will still be around and not need replenishing when I return in December.

Of course, Costco isn’t entirely comprised of great deals. You still have to watch yourself, and know how to spot good values and avoid poor ones. There are always a few traps laid around the store.

Some things are ridiculously overpriced (a 2-pack of 6 foot HDMI cables for your computer or TV for 38.99 – the correct value of a 6-foot HDMI cable is about $2.00, and there are dozens to choose from at Amazon. My computer monitor is getting the signal I’m seeing right now from one of those very cables – works perfectly).

Other products are fairly priced, but stupid, like a stainless steel electric Turkey Fryer with carbon filter and digital temperature controls for $138.99. (WTF?)

The hardware and tools section is very-well priced, although the selection is minimal. Last year I bought a FatMax rolling tool chest for my carpentry business – it costs $80 at Home Depot, but Costco had them at $30. I also noticed that the size of car battery that fits my car is available at Costco for $68. I just paid $102 for the same model at AutoZone. Damn!!

And still other products are tempting and well-priced, like a fancy digital weather station that measures wind and rain and connects to your computer and publishes your stats on the internet, for $80… but yet completely frivolous and unnecessary, because you can find out all the weather parameters you need by looking at the internet-reported values from your NEIGHBOR’s digital weather station.

Overall, the ultimate value of Costco from a Mustachian perspective is this: drastically lower prices on many high-quality grocery staples. You just can’t go wrong from a frugality sense, cooking your way through a 50-pound bag of rice that cost you only $18. Their prices are remarkably consistent around the country, so if you can get to a Costco, you can make grocery shopping in California almost as cheap as eating in Alabama. If you’re having trouble getting your own grocery costs equal to or lower than mine ($75/week for a family of 3, even with plenty of luxuries like coffee and organic meat and fish thrown in), you might want to compare your own food prices to those in this article.

Previous Post: Get Rich With: Moving to a Better Place Next Post: What is Stoicism and How Can it Turn your Life to Solid Gold?

Want More?

TOM September 30, 2011, 6:36 am

totally agree and love Costco, also love that it is 4 miles from my house and I can get there more often than 3 – 6 months. Milk there is not sold in ridiculous sizes and is regularly $1-$1.50 per gallon cheaper than other stores.

I’ve noticed that I’m not a big fan of their produce. Any given week I can get a better price on grapes at a local grocery store (probably loss leader). Sometimes its fairly priced, but so gigantic I’d rather buy elsewhere. For example, apples may be 99c a lb but their almost a lb each. I’d rather get the 2in variety at the local grocer. Bananas are usually a deal.

Do you have an Aldi nearby? They’re a “discount” grocer, sell 95% generic branded merchandise but have generally very good prices for staples. No membership fee or bulk sizes required.

Reply
- shanoboy September 30, 2011, 7:02 am
  
  Ton nailed it, check out Aldi if you have one nearby. I did some similar comparison shopping as MMM, but with Aldi and Costco and Aldi typically beat them a little in price, the give and take being that all their products are generics.
  
  Reply
- Jeff September 30, 2011, 7:54 am
  
  Produce is not a good deal at Costco. Splurging on the fancy juice though is another story!
  
  Reply
- Jason September 30, 2011, 12:07 pm
  
  I also recommend Aldi for those things that wholesalers like Costco and Sam’s don’t stock. Their canned goods and produce are much less than the normal supermarket chains and and you don’t have to buy the huge #10 cans like you would at a wholesaler. When I do most of my shopping about ever 2-3 months, I get the 50lb sacks of rice, flour and cat litter and the 5lb bags of cheese from Sam’s then go to Aldi for the things like fish, milk, canned goods and any produce that I’m not currently growing. I usually have about half a chest freezer worth of flour, meats and milk products and that lasts until the next trip.
  
  Reply
  - MMM September 30, 2011, 12:57 pm
    
    I agree – I will be all over this Aldi chain if they ever expand this far West!
    
    Reply
    - MattM May 3, 2015, 8:11 am
      
      I’m fortunate that Aldi and Costco are on the same street and about 4 miles from my house! I originally got a membership there to purchase my hearing aids, but they have very good prices. However, Aldi is small, fast, and I can get in and out in less than 10 mins, including bagging my own groceries. Trader Joes is also a good one.
      
      Reply
zero3blur September 30, 2011, 6:55 am

Enlightening post! I was wondering about the value of a Costco membership just last week.

What’s your take on the regional supermarket King Soopers, though? We visit Colorado regularly (Louisville, actually – not far from you), and tend to shop there or Costco. Safeway…not so much.

Reply
- MMM September 30, 2011, 1:00 pm
  
  King Soopers is a nice store, and I like the Denver vibe. Overall, they beat Safeway on certain products, especially organic produce. They lose on some other things like bread, cheese and milk.
  
  I definitely prefer King Sooper’s over Safeway overall, but it is an extra mile or so further from my house, so I tend to use Safeway for high-speed stock-ups during the week.
  
  Reply
Kevin M September 30, 2011, 7:15 am

Damn, I just bought a battery at AutoZone myself for $106! Good comparison though, I’m salivating at the 4 lbs of thick sliced bacon. We used to be Sam’s Club members, but I got so fed up waiting in lines it wasn’t worth my time (we didn’t usually buy as much as you). Is Costco any better?

Reply
- Josh September 15, 2014, 8:53 am
  
  The lines at Costco tend to be about as long, but move faster. Having shopped both, for the stuff I buy, Costco is cheaper. The employees seem nicer and happier, too.
  
  Reply
  - IAmNotABartender November 20, 2014, 11:03 pm
    
    It might be because Costco pays their employees a living wage.
    
    http://www.forbes.com/sites/rickungar/2013/04/17/walmart-pays-workers-poorly-and-sinks-while-costco-pays-workers-well-and-sails-proof-that-you-get-what-you-pay-for/
    
    Reply
Carrie September 30, 2011, 7:32 am

Wow! That does add up to some significant savings. I wonder about those studies, though, that say that there is a psychological phenomenon with bulk buying… you use more and waste more. Your thoughts?

Reply
Jeff September 30, 2011, 7:52 am

Indeed Costco can save you money if you’re careful.

My fiance and I figured that we would pay for the membership in coffee, spinach, and soy milk savings alone. We also buy many of the same things on your list, and agree that you have to be careful what you’re purchasing as some things are not that great of a deal.

We also use our Costco AMEX cards for just about everything we can, which pays 2% on most purchases, and 3% on gas. If you live close to a Costco gas is much cheaper and pays an additional 1%. The great thing about the rebate is that you can redeem it for cash!

My big debate is whether to buy a bike trailer to ride to Costco. Its around 8 miles from our house, and can be done entirely on bike paths (12 miles for this route). I figure it costs me about 2 bucks to drive there and back in gas, and a bike trailer from Nashbar is around $75. Of course, it would get other uses as well….

By the way MMM, we’re just down the road in Denver!

Reply
- Jeff September 30, 2011, 7:57 am
  
  Oh, and almost forgot to mention that we get all our bread from an Orowheat bakery outlet. By far the cheapest bread you can find. I’m talking 7+ loafs for $4.
  
  And why hasn’t anyone said anything about the samples! You can eat for free at Costco if you go there at the right time!!
  
  Reply
- MMM September 30, 2011, 12:49 pm
  
  Bike trailers are great! Even if you don’t have a kid, they let you do all groceries and semi-bulky errands without using your car.. or perhaps not even owning a car!
  
  I have carried loads home from Home Depot, Target, and even transported full propane tanks home for the BBQ in my bike trailer.
  
  Last week I saw a friend of mine transporting his ENTIRE GAS BARBECUE, one of the big ones with a cabinet pedestal and two side burners, down the street on his bike trailer – to bring it to a street party a few blocks away. I gave him the Most Mustachian Biker award for the day.
  
  Reply
Personal Finance Source September 30, 2011, 8:04 am

Good investigation. I have been curious about a possible Costco membership and if it would be worthwhile for my family. The big concern I have is we don’t have the room to buy alot of items in bulk. But it could be worthwhile for me to do my own comparison between our local Costco and WalMart where we do our grocery shopping. You had some great savings but really the savings depends on personal preferences and what you normally buy. Unless you plan on changing eating habits to eat items that will be saving you money, which is definately not a bad idea either.

Reply
Steve September 30, 2011, 8:15 am

I like Costco’s price on gas and socks. However, I find I can get much better deals on groceries at the grocery store with coupon. However, I have to be less picky and willing to try new products. Though that was a good deal on olive oil you posted – if it’s extra virgin.

Krunchers potato chips. .39
Sara Lee deli meat .99 10 ounces.
Franks Red Hot – Free
Pierogis .59
Sweet potato fries Free
Delmonte fruit .50
2 lb carrots .83
Cookie dough .94
Coconut milk .37
whole grain pasta .15
onions 3lb 1.49
fall squash .99 lb
cabbage .59 lb
napa cabbage .99
whole chicken .59 lb and I have a $1 coupon for it.
whole wheat bread .88
Ragu spaghetti sauce .73
Eggs 1.29 doz

Reply
David Baillieul September 30, 2011, 8:41 am

Timely post. Our Costco membership expires next month. However, as we are recent empty nesters, $400 grocery trips are really unnecessary for us. Locally, their loss leader Propane, Roasted Chickens, etc. are attractive, but you cannot go near the store on weekends due to the line ups at the cash. Still undecided on the renewal…..

Reply
Jenny September 30, 2011, 9:09 am

Oh man. Costco is truly my most unfavorite place to go. I find it overwhelming and full of people with large carts whipping around being pushy. But, we use a lot of staples, and a freezer, so I think we’ll continue to go. I have one close and on route to many places, but I still only go every 4-5 months because I hate it so much. I have been tagging along on my parents membership – taking them shopping and doing my own shopping, so I don’t even have to pay for the membership! Double win, I guess.

Reply
- Mrs. Money Mustache September 30, 2011, 10:29 am
  
  Jenny – I loathe going to Costco as well, probably for the same reasons you mentioned. This is why I let MMM do all the Costco shopping. It’s always exciting to see what he comes back with though!
  
  Reply
- Mr. Frugal Toque September 30, 2011, 12:04 pm
  
  That’s odd. Our Costco is easily my favourite place to shop.
  The Costco nearest us, which we visit for our weekly shopping, never has any of these issues. Sure, the place is huge, but it’s spacious with lots of free samples of stuff, short lines and a lot of happy, helpful workers.
  On the other hand, I don’t know any place I shop where I deal with other customers being pushy and the only place where workers have been jerks (as opposed to just cranky) has been Walmart.
  
  Reply
  - Jenny September 30, 2011, 12:46 pm
    
    Great! Maybe you can come do my shopping. Then again, maybe it’s because I hate all shopping in general. I also find the large carts hard to negotiate while pushing a stroller/wheelchair and pulling a cart at the same time. Even in the middle of the days, the lines are long and the people are kind of grouchy. I do wish, though that they would extend the hours a bit so I could go earlier or later, minus kids.
    
    Reply
    - Mr. Frugal Toque September 30, 2011, 5:08 pm
      
      When we had a kid so little he couldn’t sit up, we just put his carrier inside the giant cart and piled the groceries around him and under the cart. Once each kid was big enough to get out of that, he could sit in the child seat in the cart or walk.
      A wheelchair, however, would be awkward in any setting if you have to push that *and* a cart.
      Maybe the Canadian Costco stores have a different mentality, but I’ve never had a problem with long lines, even on a weekend.
      
      Reply
      - Jenny October 7, 2011, 8:35 pm
        
        Well, just to see if I was crazy, I arranged to go on a weekday, midday, sans kiddos/wheelchairs/strollers, and you’re right it was better. That’s how I should arrange to do all my shopping. Still grouchy people whipping around, but it wasn’t packed at all so it was fine. I guess it was just enough negative associations to overcome it took a few trips!
        
        Reply
- PigPennies September 30, 2011, 12:14 pm
  
  Despite my love of Costco’s prices, I loathe the actual being there – but I find the trick to making it bearable is to NEVER go on the weekends. Those huge carts, the swarms of people…it makes me want to hyperventilate just thinking about it.
  
  I too am mooching off my parent’s executive membership, so I don’t have to worry about the membership fee. But I’d probably still cough it up if they ever cut me off :) The savings really are fantastic – as long as you exercise impulse control!
  
  Reply
  - MMM September 30, 2011, 12:45 pm
    
    I can see the store appealing to certain personality types rather than others. When I shop, I am all business, and I feel like it’s a war of Me vs. The Store. I want large quantities, concrete floors, and an efficient layout. I do not require shopping mall niceties like Boo-Tss-Boo-Tsss House Music in the background or halogen lights illuminating bamboo floors and tight-jeaned teenagers asking if I need any help.
    
    But it is true, those Costcos can get crowded, which compromises the efficiency. I suspect the skill level of the branch manager will affect how well they are able to keep the store unclogged and the staff polite. Since I’m saving $280 for an hour of work, however, I’m willing to deal with whatever I have to.
    
    Reply
    - Erica / Northwest Edible Life September 25, 2012, 2:04 am
      
      True story: my dad worked for a company that made concrete floor polishing machines. They did a demo for Costco and polished the floor like glass. You could see the reflection of thousands of industrial lights shining and reflected back from the polished floor. It glowed. Costco reaction: “Too nice! Our members want a rough industrial experience. Rough it up.” :)
      Re you v. store: Costco also deliberately encourages a “hide and seek” quality to every shopping trip by deliberately moving staple goods. This leads to members (not you, obs, other non mmm members) being so fucking grateful they finally found the rice that they buy two bags just in case and rush with all the impulse purchases they picked up while looking for the rice to the checkout, grateful to have “won” their quest and happy to dole out $540.
      I adore Costco. I’ve spent too long cooking commercially and in quantity. I can’t help it, wholesale food just feels like home. Grocery stores feel…precious.
      
      Reply
rjack September 30, 2011, 10:32 am

Does anybody know how Costco grocery prices compare to Wal-Mart (not Sam’s)?

Reply
- MMM September 30, 2011, 12:27 pm
  
  Stay Tuned! Looks like one of our readers has volunteered to do an investigation and guest posting on that in the near future. It will be quite fun.
  
  Reply
  - Dan September 30, 2011, 1:37 pm
    
    Target blows Wal-Mart out of the water. Comparable prices but three times better shopping experience – and you can get 5% off all your Target purchases with the Target card.
    
    Reply
Dan September 30, 2011, 1:41 pm

I love Costco, but you do have to be careful about where Costco ISN’T the price winner. For example, pasta sauce, brown rice, hot sauce – cheaper at Target. Bread is by far cheaper at the bakery outlet. Olive oil, wine, and beer are (surprisingly) cheaper at Trader Joe’s – Two Buck Chuck and $3 six packs of Simpler Times – that’s what I’m talking about! And buy a year’s worth of Trader Joe’s gift cards in the first quarter of each year on your Chase Freedom card to get 5% off all of Trader Joe’s stuff too.

Reply
- Julie May 4, 2013, 4:03 pm
  
  I would love to see a comparison between Costco and Trader Joe’s too. I don’t think they have TJs near Boulder though.
  
  I looked into Costco, but where I live, there is not much organic stuff. If there were organic berries (fresh or frozen) it might be worth it for me. I spend a ton on frozen organic berries.
  
  Maybe I will check it out again.
  
  Reply
  - Mihaela September 4, 2014, 11:21 am
    
    I have lived near one in Harrisonburg, VA, one in Durham, NC and Lacey, WA and all of them had frozen berries! Of all kinds! ORGANIC, of course. Also cherries. Fantastic prices. Up in PNW we had tons of berries to pick ones own and so on and still Costco price on organic berries (mixed, blueberries, strawberries, cherries) was unbeatable. Also, frozen mango chunks, peas, corn, beans… all ORGANIC.
    
    Reply
Dan September 30, 2011, 1:44 pm

PS Costco is amazing just on the gas savings alone. They’re usually 20 cents a gallon cheaper and that is before the 3% cash back on the Costco Amex card (great card BTW). And a five pound frozen bag of good quality spinach for $5.50; six huge red bell peppers for $6, 14 huge apples for $8? Hell to the yes.

Reply
- Oh Yonghao May 24, 2014, 9:04 am
  
  I still exclusively fill up at Costco, but since I moved to within a 5 mile radius of everywhere I go and started biking filling up once a month is all I do. It’s always a weird feeling because I can barely recall what the gas cost the month before and since I started this in the winter it’s gotten the summer price hike as the gas formula changes. Really happy to have changed from $300/mo to $60/mo by moving, even with the toll that’s had on my AmEx rewards.
  
  Reply
Math Teacher September 30, 2011, 3:02 pm

No one mentioned the pharmacy items at Costco. I take a 10mg generic Zyrtec pill every day. Costco sells a years supply (360 tablets) for $16.85 a bottle. My local CVS sells a months supply of their generic (30 tablets) for $19.95 a bottle. A years supply from CVS costs $240 vs. $17 from Costco. The savings on just that one purchase is equivalent to 5 years of membership fees. The only thing I really dislike about Costco are the receipt checkers at the exit door.

Reply
- Dan September 30, 2011, 4:58 pm
  
  Great point Math Teacher. I have a high deductible HSA and needed a semipricey med prescription filled ($300). Not only were they cheaper than every other pharmacy I called (by $40!), when the pharmacist heard I was paying out of pocket, she told me about a special Costco pharmacy program for cash payers that got me another $15 off the cost. Awesome.
  Incidentally this is also a big reason why our health care costs are so huge in this country. When paying by cash I’m incentivized to shop around. The fact that Costco discounts for people who specifically ask how much the price is (instead of just running it through their insurance in which case price is no object) points out the big efficiencies that could be gained by more high-deductible plans in this country. But that’s probably another MMM post :)
  
  Reply
- Diane October 9, 2011, 11:39 pm
  
  Hi Math Teacher – I hate that door check thing too, but once in a blue moon they do catch an error, occasionally even in my favor. I think I heard somewhere that one of the reasons they mark the receipt is to acknowledge that you have received everything you paid for. Say you paid for the movie ticket package but forgot to pick it up prior to leaving the store. Another reason is there are a tiny minority of folks who buy one, steal one and try to use the receipt to return the stolen one. Marking the receipt apparently discourages that behavior, saving money for every member. I can get behind both of those reasons, so have become much more patient with the receipt patrol.
  
  Reply
  - Erica / Northwest Edible Life September 25, 2012, 2:09 am
    
    Costco has one of the lowest shrinkage rates of anyone. Not shrugging at theft means lower prices for shoppers. And they always draw my kids a smiley face. I don’t mind the door check much.
    
    Reply
- Amy October 16, 2013, 10:31 pm
  
  You don’t even have to have a membership to use the Costco pharmacy and save all that dough. Just found this out at the Portland, Oregon store. I’d let my membership lapse since I now live far away from my nearest Costco.
  
  Reply
- ov December 2, 2014, 11:47 pm
  
  Amazon sells Costco brand (Kirkland Signature) pharmacy items for a similarly low price, e.g. 365 Zyrtec for $21.99.
  
  http://www.amazon.com/Kirkland-Signature-Aller-Tec-Cetirizine-Hydrochloride/dp/B0036DEALS/ref=sr_1_1?ie=UTF8&qid=1417589056&sr=8-1&keywords=kirkland+signature+zyrtec
  
  Reply
Gerard September 30, 2011, 3:52 pm

I let my Costco membership expire this summer. Mostly, the things my local Costco was super-cheap for, I don’t use (gas, coffee, packaged foods), and the things I use a lot, it was either the same price as supermarket sales (canned tomatoes, good pasta, bacon, olive oil) or it didn’t carry (parboiled rice, big sacks of Legumes Of Faraway Lands). And a few of their items were crap (those glass-jar Krinos olives).

I do miss their cheap good parmesan reggiano, though… time to suck up to somebody at work with a card (and a car!).

Next time I’m in Toronto, I should try a comparison shop between Costco and the stunningly cheap big independent Asian supermarkets… I usually get out of there with as much as I can carry for about thirty bucks…

Reply
JJ October 1, 2011, 6:20 am

I am interested in seeing your staples list and what types of meals you make with it.

Reply
- Mike February 22, 2017, 6:06 am
  
  I would too. Transportation and meals (mostly at home) are my largest expenses. I’ve crushed the gas bill with help from this awesome blog, now the food bill.
  
  Reply
Marcia @Frugal Healthy Simple October 1, 2011, 7:46 am

I do love Costco, and we save money even though we don’t buy much there at all anymore. We tend to shop farmer’s markets for produce and meats, and we’re lucky to live where we can (it is not cheaper to shop this way).

Costco is not cheapest on everything…but they are on a lot of things. I found myself shopping loss leaders and going to several stores to hit the sales, only to realize that doing this was only saving me a very small amount (pennies per lb) compared to Trader Joe’s or Costco. That’s when I decided the extra hour per week spent looking through fliers and stopping at different stores. You have to know your prices either way. My options are Costco, TJ’s, and 3 major grocery stores. We don’t have Sam’s, Walmart, or Target. (or Aldi)

I hate shopping at Costco on weekends too – awful. Luckily, spouse and I work a couple of blocks from Costco. And spouse likes to do that shopping trip. At lunch time, it’s not busy at all. We’ve been biking in 2x a week, so we have to choose the day correctly.

If I ever feel lazy and not like cooking, their processed foods are cheap – think veggie burgers, roasted chicken, hummus, salsa. Our regular purchases are a couple of types of cheese, yeast (though that lasts us 2 years), bread flour in 20-lb bags, quinoa, canned tomatoes, bread, butter.

Reply
- Merrie March 16, 2015, 5:14 am
  
  “I found myself shopping loss leaders and going to several stores to hit the sales, only to realize that doing this was only saving me a very small amount (pennies per lb) compared to Trader Joe’s or Costco.”
  
  This is what I found as well. Costco may not have that rock bottom best price, but their regular price is almost as good as the sale price other places, on a lot of the things we buy. Since my hubby is a die-hard meat eater and the kind of guy who likes to make a zillion little side trips to get ingredients for things if we don’t already have a good variety on hand, making sure we consistently have meat on hand without having to pay an arm and a leg for it is a neverending struggle. Paying Costco’s full price for meat isn’t too painful. We also save on dairy (we get a lot of organics), frozen fruits, canned veggies, and rice. We are still pretty new to Costco and are still learning.
  
  Reply
Julia October 1, 2011, 7:55 am

You mentioned that you have other “Costco staples” that you buy but just didnt need this time. What are some of those?

Reply
Fu Manchu October 1, 2011, 9:14 am

MMM hits a homerun again! So cool. We just got a free 60 day membership at BJ’s and I ran similar – albeit less exact – calculations vs. our Trader Joes / Shaw’s. For us, it was a question of whether it warranted the rental of a Zipcar (it did).

So, one question stands out…you buy 2lbs of sliced cheese, 2lbs colby jack, 5lbs shredded mozz. Nine pounds of cheese, I’m guessing you freeze it? If not, how long does it last? The thought to buy cheese in bulk actually never occurred to me, I always assumed it was so perishable.

Reply
- MMM October 1, 2011, 10:42 am
  
  Good question about the nine pounds of cheese. First of all, all three MMM’ers in my house like to rock the cheese daily, so it goes fast. Secondly, the stuff lasts forever in your fridge before you open the package for the first time. The sliced cheese from the article is now all gone.. the Colby has a Use Before date of Dec. 27th, and the shredded (for lasagnas and pizzas, of course), has a date of November 27th. For the shredded stuff, I bust it into 3 bags – one for fridge, 2 for freezer.
  
  Reply
Dancedancekj October 1, 2011, 10:19 am

I would also like to add that the quality of certain Costco items for me, increase the value of their purchase. Take for instance, their Yukon potatoes – a little bit more expensive than what I might find at the grocery store, but are huge, way more delicious, and seem to sprout less quickly. I’d rather pay a little extra for good quality, delicious potatoes that steam, bake, fry, and mash effortlessly. Did you know that Costco is one of the only places I can find tilapia filets not from Asia? (regarding food safety issues – their fresh ones are from Honduras)
Their sweet potatoes, bags of onions, feta cheese, almond butter, olive oil, bulk nuts, and coffee are the things I find to be most useful and the best buy for me. The feta cheese, almond butter, olive oil, and bulk nuts are a great way of upgrading the value of your meals too – adding these to salads, pasta, stir fries, soups, desserts, snacks makes me feel like a king for a relatively low price.They also fit in with my diet plan as well.
I like Costco, but I think you just have to be careful of what you buy there. Which most Mustachians are, but I just shake my head at what people purchase in the checkout sometimes.

Reply
Kaitlyn October 1, 2011, 3:11 pm

You can get around paying the membership fee if you have someone purchase you giftcards. They allow you to enter costco with the gift cards, and you can pay the difference with another form of payment. My uncle buys his brother 10 $10 gift cards ($100 total) this allows for 10 free trips to costco where you can buy as much as you want each time (as long as you have the funds)

** Even greater savings!

Reply
- Logan December 19, 2020, 7:44 am
  
  This post is almost 10 years old but I got here by following a chain of links from another post, and I wanted to add this same thing! One person with a Costco membership can share the savings by buying small giftcards for their friends and family.
  
  Reply
poorplayer October 1, 2011, 4:05 pm

No Costco for me. The closest one is in St. Catherines, Ontario, and I am not about to try crossing the border with all that stuff in the car.
I am sure it is just me, but these big box stores give me anxiety attacks. I keep looking around at the sheer volume of stuff, and thinking there is something like the entire gross national product of Bangladesh sitting in that store. I become uncomfortable, find it difficult to breathe, and have to leave. I prefer human-sized stores, so locally it’s Save-A-Lot and Aldi’s.

Reply
Diane October 1, 2011, 9:06 pm

I love, love, love Costco, for all the reasons a frugal shopper should: to buy the things one uses regularly at the best price on a consistent basis. I don’t have to worry about clipping coupons and if I have to buy a product that I don’t buy often and don’t know the best price, I know I’m not going to get hosed. My mechanic wanted $35 for new windshield wiper blades that were $7 at Costco.
I hadn’t heard about the gift card “trick”, so I’m not sure it that’s valid. Costco is great at tracking their customers, so I’d guess after a number of these “visits”, a membership might be requested. Certain purchases may not require membership, like pharmacy and booze.
My favorite Costco trick is not of my own making: my sib works there, so I get a free Family Member card, which is connected to my Costco AMEX. One card for two purposes. It even pinch-hits as an ID on occasion, as it has a photo. And of course, there’s the rebate…
However, there are certain areas I avoid entirely, such as books. Danger Will Robinson! Even the free samples can be trouble: you may well find yourself buying things that are not on your list. Also sampling tends to happen at busier times, when I don’t want to be there.

Reply
Chris October 2, 2011, 3:32 am

MMM-

I like the side-by-side comparison. I’ve always wondered if it really saved you that much by shopping in bulk at Costco. I’m sold. I’ll be tweaking our shopping habits to include more Costco trips. I like the idea of buying staples in bulk and then buying more perishables locally. We get plenty of organic meats like Salmon, Caribou and Moose meat sent to us as gifts from our family in Alaska. I also hunt once a year with my father in law and we typically take 1 or 2 Caribou, couldn’t ask for better organic meat for spaghetti and burgers. To top it off, there’s a great satisfaction in responsibly harvesting your own meat. We get lots of fresh veggies from our garden and have a weekly farmer’s market just down the road. We’re fortunate on that end, living in California means having amazing fresh fruit and veggies nearby. Thanks for the shopping comparision MMM!

Reply
joan October 3, 2011, 11:31 am

I like that Costco is stocking more and more organics – items like quinoa, pasta, and my personal favorite “Better than Bullion” in jars. Best soup base ever!

Reply
Jay October 3, 2011, 2:31 pm

What is your opinion on buying bulk 1 year supplies of dried foods(10-30 year shelf life)? I’ve seen some at costco and sam’s club, but I’m not sure is such a thing would become necessary. However if there is an oil shortage in the future, food prices could get crazy fast.

Reply
- MMM October 3, 2011, 3:41 pm
  
  Wow, interesting idea.
  
  I suppose you could calculate the annual cost of holding that food supply (if it cost $1000 and you currently have a 4.5% mortgage, consider this to be a $45/year cost). Then estimate the amount you believe oil will go up over 10 years in various scenarios, and the percentage of this that goes into food prices. If oil doubled, food costs might multiply by 1.5. For me, this would increase food costs by $2000 per year.
  
  Then suppose you believe the chance of oil doubling in ten years is 10%. So the actual expected cost of the oil scenario (cost multiplied by probability) is $200 per year. Since the food cost is only $45/year, in this hypothetical situation it is probably a good hedge. Of course, there’s also a chance of food prices going down, and various other complications as you adjust the equation in an attempt to make things more realistic.
  
  Another option is to invest a certain percentage of your portfolio in oil companies. These already pay great dividends, and their share prices and dividends should increase in the event of an oil price increase. Meanwhile, they don’t take up space in your basement and they don’t go stale over time (oil company execs are already as stale and crusty as it is possible to be :-)).
  
  Reply
DTB October 10, 2011, 3:09 pm

I’ve done the analysis and we (my family) actually make our membership cost back just from purchasing our gasoline at Costco.

All other savings from shopping at Costco is gravy at that point.

Reply
Fred Thompson October 11, 2011, 4:29 pm

Save your $50/year and get the Executive membership for $100 and the AmEx card. Treat the card like cash. At the end of the year, if your direct rebate from Costco does not come to $100, they will give you the difference. Ergo, $50/year or free for a year. The AmEx card has extra rebates in addition to the Costco rebate.

Best food items: 6 lb cans of Roma tomatoes for $3.50 or so and the big bags of dried fruit. Compare those to the grocery store prices, you’ll be amazed.

Reply
Dan October 11, 2011, 5:45 pm

Fred, that’s not right. It’s $50 a year either way. The exec card gives you 2% cash back in a rebate on all front-of-store register purchases at the end of the year; if it doesn’t equal at least $50, they’ll refund [only if you ask for it!] the difference between your rebate and $50 (so the exec card doesn’t end up costing more than the regular membership).

Of course, if you buy more than $2,500 a year at the front registers, you’ll be ahead. And of course the Amex card comes with nice benefits like 1% cash back on all purchases including Costco itself (which is on top of the 2% exec membership bonus), 2% on dining and travel, and 3% on Costco gas. So there are benefits to the exec membership, if you get the Amex with it. But if you spend less than $2.5k/yr, it still costs you the same as the regular membership – it’s not zero and they don’t refund you past $50.

Reply
- 2HeadedBoy2 February 20, 2015, 7:38 pm
  
  It’s actually an even worse deal than that if you don’t spend the minimum. With the membership price increase ($55 for the basic, $110 for the executive), the break even point is $5500 for either membership. If you spend less than that (which you should, as that’s nearly $460 a month), you’d be better off with the basic membership, even with the reimbursement. Say you spend $200 a month, which is $2400 a year. That would net you a $24 reimbursement with a basic membership, and $48 with an executive. If they refund the difference between the membership fees ($7 extra), your cost for the annual membership is still $55. For the basic plan, the annual cost would be $31 (or $55 minus the $24 reimbursement).
  
  I try to explain this to the employees every time they try to encourage me to upgrade, but to no avail. Still well worth the membership fee in my opinion, just make sure to always do the math.
  
  You also get a better return by using a Fidelity AmEx (2% back on all purchases as opposed to the 1% back on in-store purchases with the Costco card, all with no annual fee).
  
  Reply
  - Diane C February 20, 2015, 9:06 pm
    
    “You also get a better return by using a Fidelity AmEx (2% back on all purchases as opposed to the 1% back on in-store purchases with the Costco card, all with no annual fee).”
    
    Just to clarify, you get the Costco Rebate AND the AMEX rebate. Well, at least until March of 2016 ;-)
    
    Reply
  - Michael March 30, 2015, 1:17 am
    
    I work for Costco and I’m not sure you understand all the details of the membership. There is NO reimbursement for the regular membership, as in $0 no matter how much you spend. It costs $55 and that is that. When you get the executive membership you pay an additional $55 and then earn 2% back on all purchases. The break even point for the exec is a around $230 a month average. If you are spending more than that you are going to make more than your $55 upgrade fee and start cutting into the cost of the regular membership. This makes your membership cheaper.
    
    So to sum it up, the cost of membership is:
    
    Annual spending of $1000-
    
    regular membership- $55
    executive- $55 ($110-$20 2% rebate check-$35 reimbursement from Costco)
    
    Annual spending $3000-
    
    regular membership- $55
    executive- $50 ($110- $60 2% rebate check)
    
    Annual spending of $5000-
    
    regular membership- $55
    executive- $10 ($110 – $100 2% rebate check)
    
    I am not sure where the idea that you get 1% back in a regular membership came from but it is not correct.
    
    Reply
    - GailNYC April 26, 2016, 8:11 pm
      
      Thank you for explaining this! I went to Costco today for the first time (because of MMM’s post and all the comments here) and the guy at the membership counter was really pushing the executive membership. I refused, mainly because I don’t like to be sold something I wasn’t planning to buy, but I wondered if I did the right thing. You just confirmed I did, so thanks.
      
      Reply
Nelson October 12, 2011, 6:19 pm

My only concern with Costco (as I did this math back in Canada a few years ago and came to a similar conclusion) is the cost of storing things, especially things which require a freezer/fridge.

Though the large sizes can be very convenient, actually storing them in your house is incurring a cost as well, and what is the cost in electricity required for that chest freezer, or possibly second fridge to hold the unbearably large containers. The other thing is in storage space physically in your home. Usually my family trips of 400-600$ supply runs at Costco are for large bulk items which require storage until the next trip, and am I really saving money by purchasing that far in advance and storing it in my house while taking the risk that something could happen to it (Like say a random pesky little visitor eating through a container).

It didn’t stop me from purchasing it as I could establish a cost value to my products (nor did I care enough at the time to look into it), but thinking back on it now while I’m out of the country there must have been some crazy long term costs associated with it.

Reply
- MMM October 12, 2011, 8:23 pm
  
  Yeah, that’s an interesting point. I don’t have a chest freezer – I just throw everything into my existing standard large-ish fridge and freezer (26 cuft) and non-perishables in the pantry. A chest freezer would add about 600 kwh ($66) of electricity per year, which is about 1/6th of my entire house consumption. It would be worthwhile if it saves at least 120-200 miles per year of driving to grocery stores, which it would not, for me.
  
  Reply
  - Hillezwerg March 5, 2017, 3:22 am
    
    Wonderful site, prime style and good sense of humor. Unfortunately not too many moustachians in good old Switzerland. Two thougths on food and keeping it:
    – We’re a family of 6 and veggies are an important part of our diet. And we like to know what we’re eating. So growing or own is very moustachian, cheap and fresh. And gardening can be very stress relieving too. But it requires freezing capacity if supply should get you throug Swiss winters
    – a large an energy efficient freezer probably consumes less electricity than even a modern dual freezer/fridge. So buying seperate appliances is the way to go, and it gives you the ability to store more veggies. And eating the food you grow yourself is almost priceless!
    Bike on MMM!
    
    Reply
Frood October 13, 2011, 2:41 pm

I wonder how Costco compares to the Real Canadian Superstore, which is where we currently do our “big shops”.

The other trouble with Costco is that you have to be very disciplined to only buy the things you went there for. “OMG a 6-pack of 42″ TVs for only $2199.99!”

Reply
Jaliscokid October 18, 2011, 8:18 pm

The gas is cheapest at Costco compared to all else. And you can get a hotdog and soda for a buck and a half (I think it’s been this price for 20 years or more.)
Party planning beats Safeway hands-down. F’rinstance you can get a bucket of feta cheese less than Safeway charges for a handful; crackers, frozen hors douevres, etc…

Reply
qhartman November 1, 2011, 5:55 pm

I think your food budget is admirable, but it is a lot lower than it really ought to be.

I would normally not leave this comment on a primarily financially-oriented site, but you talk about living frugally for the health of the planet as well, so here goes…

All of the great cheap food that you enjoy at costco (and at 95+% of other grocery stores out there) is supported by an agricultural system which wastes incredible amounts of oil (in terms of both fuel and agricultural chemicals) and damages the environment. I know you get a lot of organic stuff too, and that helps, but even organic bananas have to be shipped thousands of miles to end up in Longmont, and that fuel makes for one “expensive” banana. And then there’s all the ethical concerns regarding the laborers who produced and/or harvested that food. Were they paid fair wages? And I don’t necessarily mean fair by American standards if they are living elsewhere, I mean fair for where they live, and the work they did. Is it a “living wage”?

In the end, all the savings you realize at costco are had thanks to a complex system of cost transfer involving government subsidy (transfer to everyone else via taxes), environmental damage (transfer to the future), and exploitation of people (transfer to those who don’t know better, or worse, those who are forced into slavery).

You talk a lot about how Americans complain about how expensive gas is, when in fact, it’s a lot cheaper than it should be. The big corporate food is very similar.

All of these cost transfers are minimized by buying locally produced and processed foods, but then you personally have to bear the actual cost of the food, and many people suffer sticker shock when that happens.

I’d love to see you bend your mind towards the problem of “true” food costs taking these factors into account, and see how the math works out. I hope even more that seeing those numbers, and what they imply, would inspire you to do more exploration of your local food system. Perhaps that former’s market won’t seem so expensive after all. If it is, perhaps there are other outlets that are more Mustachian, I know there are where I live.

Reply
- Dan November 1, 2011, 6:04 pm
  
  Qhartman, local food often takes even more gas and involves more pollution that centrally grown, corporate organized food. Further, one of the worse things you can do for the good of humanity is ignore the market clearing prices of goods. As Steven Landsburg points out (http://www.thebigquestions.com/2010/08/23/loco-vores/), no unit of information better encapsulates the benefits and costs to society of a good than price. Just because something is local does not mean it is better for the environment.
  
  Agreed we need to cut all the subsidies, so the price even better reflects the true pros and cons of the good’s production. But if you truly care about humanity, you shouldn’t be spending your time and energy on only buying bananas that were harvested using a “fair” wage, since such efforts generally mean that you’re wasting valuable money on a company that knows you’ll pay more than you need to for goods and services (i.e. they’ll capture more profit from you than really benefits the worker).
  
  I’ll go one further and say that buying locally is kind of a form of geographical racism. You’re saying that you’d rather pay a local farmer at local standards of living wages rather than the poor guy in Ecuador starving, happy to have a banana harvesting job at the market clearing price. Why are the people that happen to be within an arbitrary distance of you more deserving than those located further away?
  
  Reply
  - MMM November 1, 2011, 6:27 pm
    
    Agreed! I know that buying organic bananas is ensuring more sustainable farms in Ecuador, and I know that the fuel used for shipping is probably almost equal for organic vs. non-organic bananas. If we can reduce subsidies further, I’ll be able to judge the true cost of my food even better.
    
    Just as an example, when I go to the farmer’s market, I see farmers who drove in 30 miles from the country in a F-350 Dualie just to sell a few hundred pounds of peaches at 2 bucks a pound. At 10MPG for 300 pounds, these peaches are burning more fuel than the large organic peach farm in California that loaded several hundred tons of them into a railcar that took them to Colorado, even after accounting for the tractor trailer (20+ ton capacity, 5MPG) to make the local delivery.
    
    Reply
    - Dan November 1, 2011, 6:51 pm
      
      Agreed with MMM. And I’ll take it even further. If you have fifty cents to spend on a fancy organic “fair trade” banana because you want to help humanity, you’re probably better off buying the nineteen cent, cheapest banana you can find, and give the $0.31 diff to an organization like Oxfam or CARE International. The suffering among the people these organizations help (people dying for lack of one dollar antimalarial drugs) are far greater than the Ecuadorian banana harvester who doesn’t make what you think is a fair wage.
      
      Reply
    - qhartman November 1, 2011, 10:28 pm
      
      OK! Rather than totally derail the discussion here, I’ve posted my responses over my blog:
      
      http://www.feedingthemachine.com/2011/11/what-is-the-true-cost-of-food/
      
      I’d appreciate reading more of your thoughts. It’s kinda lengthy though, this is a complex topic we’re venturing into!
      
      Reply
      - MMM November 6, 2011, 4:44 pm
        
        Thanks Quentin! I read your article and I like what you’re doing.
        
        I actually agree more than you might think with the local food movement, although for different reasons: I am more excited about people knowing the people they do business with, because it tends to spark unusual benefits in the happiness of a community.
        
        As more of an economics and capitalism-minded person, I still believe that the highest efficiency is attained with international trade, which overall leads to the highest level of material wealth. If continued material expansion were our goal, and we had the political will to fix the current environmental and labor exploitation side effects, this would be the “richest” situation even after we made it 100% sustainable.
        
        BUT – we passed the level of having enough wealth long ago. So we can afford to make some trade-offs for happiness, which means hanging around and telling jokes with people who live near you. This leads me directly into your camp of going to a simpler and more local lifestyle, including food.
        
        But I have a challenge for you. To make your argument and even convince your capitalism-and-trade-minded adversaries, you need to understand things from their perspective. That means you must understand why “market price” is indeed a good estimate of the social cost of something as long as the environmental and labor rules are fair. And since they are not currently fair, you need to use your imagination to see the good that is mixed in with the bad.
        
        For example: my old high-tech company moved some of its manufacturing to Mexico because their labor costs were 75% lower than what they were paying in Texas. Is this exploitation? I had the chance to go and visit the actual factory and work with my compadres for a week in the new manufacturing plant. They were universally excited about their new jobs, they were earning more than they ever had before in Guadalajara, and using the money to get their kids off to a good start in life, live in a safe place, eat healthier food, etc. These manufacturing plants were a transforming force for Guadalajara and they fed new skills into the city and led to Mexican engineers starting their own companies nearby to both partner with and compete with the US-based firms.
        
        That is what international trade feels like to MOST of its participants. As I said, your assignment is to read more about it and learn why the argument about “But American jobs are then LOST in the long run!!” is false. There are definitely problems that crop up, but these are caused by occasional corruption rather than a flaw in the idea itself. So you can work on reducing the corruption on large-scale trade, which isn’t going away, AND you can enjoy doing more local business, which allows you to weed out corruption with your own eyes. Both approaches work and I think we should do both.
        
        Reply
      - qhartman November 7, 2011, 3:50 pm
        
        It looks like you edited your response quite a bit compared to the version I got in my email, so I’ll not post my response here as it not only is pretty offtopic, but it sounds like your views on local foods are more balanced than the impression I initially got led me to believe, making the whole thing look a bit like “preaching to the converted”. In any case, if you would like to see it anyway:
        
        http://www.feedingthemachine.com/2011/11/more-on-the-real-cost-of-food/
        
        Reply
Maura January 11, 2012, 2:08 pm

I have heard that you can shop at Costco if you have a Costco gift card to spend. So if you don’t go there often, you could get a friend with a membership to buy you a few $20 gift cards, and use one each time you go.

Also you can go to Costco without a membership to buy prescriptions, This is a federal law. And Costco has a list of prescription that they sell for a low price.

So there’s two ways to shop at Costco without paying for a membership.

Reply
Clint April 13, 2012, 6:43 pm

I’m still catching up on early posts, but have to note: I laughed out loud when I got to the yeast comparison!

Reply
Joy April 29, 2012, 9:11 pm

I have two Costcos less than ten miles from me, but live alone. While I have freezer space and could appreciate the gas savings, do you still think that it is worth the $50 cost over local places like Trader Joe’s and Target (no Aldi here)?

Reply
- SunTzuWarmaster July 27, 2012, 7:54 pm
  
  I have conducted extensive market research on the subject, and have discovered that the best-of-both-worlds options is to know someone with a Costco/Sams/BJs card, and convince them to bring you with them twice yearly. Offer to buy them a six-pack if you’d care to.
  
  On that trip, super-stock-up on nonperishables and frozen items (my one thing of laundry detergent has lasted more than a year). Yeast, rice, lentils, flour, olive oil, toilet paper, paper towels, laundry detergent, windex, almonds(!), frozen blueberries, frozen fillets, boca crumbles, canned items (corn, kidney/black beans, cream of chicken/mushroom soup), tuna, spaghetti, egg noodles, jars of pasta sauce, etc.
  
  Then, proceed to purchase fresh meat/produce (WinnDixie in this area), and add it to your pasta/sauce (spaghetti dinner!) or staples (almond crusted tilapia on a bed of rice), or your fresh produce (salads).
  
  Reply
James September 1, 2012, 9:56 am

I have found we can get similar prices by buying bulk at my local co-op. Unfortunately I don’t keep track of prices, and I know people around here are rightly concerned with fact and not just guesses. I buy whole wheat pasta, peanuts, hard winter wheat, honey, buttermilk powder, vanilla extract, tea, oats, chickpeas, etc. We do a lot of bulk special orders and since we are members the markup is very small. (just became life members now that we have paid the $10 membership for 5 years in a row! No more membership fees to pay which is a nice feature of our co-op)

I can also order beef in bulk from local farmers at great prices, we get chicken from the local Amish farmers, and I get eggs from a friend who has chickens. (Super high quality fresh eggs from grass and compost fed chickens at $2 a dozen? Yes please!)

So if you can find a way to mimic the effects of Costco without the yearly fee I see that as a big win. We do end up paying more for some things, but not enough to make the distance or membership to a big box store like Costco worth it.

Reply
- TomTX October 1, 2012, 5:56 pm
  
  James, that’s awesome. It’s great when you can find a co-op that actually works. There’s a notional “co-op” in Austin (Wheatsville) – it’s really just a hippie grocery store with prices higher than Whole Foods (AKA Whole Paycheck.) I need to dig into that option further – too many Trustafarians around here who like paying too much for food, so it’s not easy.
  
  Reply
Elizabeth September 7, 2012, 8:34 am

I signed up for a membership at BJ’s when it came to our town. Before that, the closest store of its kind was Costco 60 miles away over the mountains, which definitely didn’t seem worth it for my two-person household. The first time I shopped at BJ’s I bought printer cartridges for my printer, with a coupon, and saved more than $50 compared to the cost at Staples. The membership paid for itself instantly. :)

Reply
Paul October 5, 2012, 9:50 am

Cheap prices at Trader Joe’s??! You really should look more closely at what you are paying, particularly for produce. Major label grocery stores sell produce by the pound or ounce. At TJ’s they price produce by the piece and though the price ‘looks’ low it really isn’t. I am constantly using the calculator feature on my cell phone whenever I’m at TJ’s and rarely happy with the actual cost per pound. At TJ’s I only buy unique-to-TJ’S products or hard to find products like shelled/roasted pistachios, etc.

Reply
istanbul October 19, 2012, 12:41 pm

I get about 10 grocery circulars every week and use them to do a price match at Walmart. I save about 50% over safeway prices doing that. However, I buy some items from Sam’s club since even price matching can not beat Sam’s prices. They include gasoline, trash bags,peanuts,diapers,fabric softener, rotisserie chicken and generic over the counter drugs. Even these limited items more than pay itself for the membership.For example, recently I could not find a generic drug in Walmart. CVS had 90 of them for $19 while Sam’s had 300 of them for $10. Huge difference!!

Reply
Alex in Virginia March 4, 2013, 4:02 pm

JEEZ!

I had high hopes for Costco, but after doing a cost comparison against WalMart on the stuff I use all the time, I don’t know if it’s going to be worth it.

From my shopping list, Costco was cheaper for only 4 of my staple items:
toilet paper (!), canned soup, sliced packaged ham, and oatmeal. I won’t bore everyone with the calculations. The bottom line is that by buying these items at Costco instead of Walmart, I would save — on an annual basis — a total of $178. Subtract from that the $50 yearly cost of a Costco membership, and I’m down to $128 a year in savings by shopping Costco JUST for those 4 items. (Obviously, I would still be going to WalMart for all the rest of my staples.)

Now, given that Costco is 28 miles away from my house, the travel cost would end up making Costco a total loser for me. I could bundle a Costco trip with stops at Sears, Bed Bath & Beyond, or other stores to which I might have a special reason to go (like discount coupons, rewards-points purchasing and so on). But that would have to be once in a great while (every 2 or 3 months).

So maybe I’ll save $10 a month… and maybe I won’t.

In the final analysis, is it that much to my advantage to go ahead and plunk down $50 for a year’s Costco membership (since I let mine expire last year)?

I don’t really know. What do you think?

Alex in Virginia

Reply
- Diane March 19, 2013, 11:39 am
  
  I know I’ve commented on this before, but I feel compelled to reply to you, Alex.
  
  You missed a couple of points in your decision making process. One, Costco offers a free AMEX and said AMEX generates rebates. Husband and I just received over $700 for buying stuff we would buy anyway. We mainly buy gas and groceries, not big screen TV’s. We pay it off every month.
  
  Second, and far more important, is that Costco pays its employees very well. They have great health benefits, stock options and generous paid vacations, to name a few. Wal-mart cannot hold a candle to Costco in terms of simple human dignity and pride that comes from earning a good wage, allowing one to support one’s family, participate in savings and investment programs, buy a house, take vacations, etc. Take a look at Costco employee’s name badges next time you’re there. You’ll see many employees with 10, 15, 20 or more years of service. Is that worth something to me? You bet it is. Especially since it costs me virtually nothing.
  
  Reply
- L'Enginieuresse April 19, 2013, 10:12 am
  
  It can be worth it, if you plan to buy contact lenses, or automobile tires, or some other large purchase.
  
  Reply
153 March 6, 2013, 12:09 pm

I feel compelled to share my favorite granola recipe of all time, since you listed pre-made granola as a staple, along with practically every ingredient you would need to make your own!!

The deliciousness factor alone is enough to make the switch worthwhile, and the fact that it’s arguably healthier and stupid easy to make just seal the deal for me.

I have also found it to be slightly cheaper than store bought, while incorporating loads more of the spendy-but-delicious nuts and seeds.

It’s easily adaptable- just keep the general proportions of oats:nuts:seeds the same, and you should be golden. Recent batches have included mix-ins from flaked coconut to dried apricots and blueberries. It’s not overly sweet, which lets the other flavors shine. I’ve also started experimenting with some nut oils, for even more flavor.

http://www.davidlebovitz.com/2009/10/granola-recipe/

Reply
mpbaker22 April 18, 2013, 2:23 pm

MMM, if you are interested I’m probably going to Aldi tomorrow afternoon. I want to get back to doing a price comparison of what I buy, but I think I might record the costs of these products to see if Costco is cheaper than Aldi and by how much. I have a feeling Aldi will come in cheaper on at least a few of the above products.

Reply
L'Enginieuresse April 19, 2013, 10:10 am

In my particular neck of the woods in Toronto, I find that meat in Costco costs more than in the other grocery stores, when they are on sale, which is most of the time between the three. The grocery stores in my area are the lower-priced ones – Food Basic, No Frills, and SuperStore. The local Vietnamese grocery store has better fruits and vegetables than Costco. (Personal taste, I can’t eat their Italian sausages).

My experience where Costco wins here in T.O: TP, detergent, baby/kids clothes, contact lenses, tires (on sale), milk, bathing suits, toys for Christmas gifts (shop in October, the good stuff is gone by the first week of November), some cheeses, cake, children’s vitamins, smoked salmon, and sometimes stuff that’s on sale that we can use. I’ve bought blankets and towels, knives, dishes, when the price/quality was right.

Reply
Jon April 25, 2013, 8:55 pm

Thanks for the research.
The thing that drives me crazy is that you cannot count on the fish being fresh in the “fresh” fish section. Definitely don’t go by their dates on the label. Sure, it might have been packaged within 3 days (the time it takes to stink) but they don’t tell you how long it was on the dock, or how long it was in transit. I’ve wasted way more time returning old fish than my hourly work rate makes up for.

Also, you can’t get grass fed beef in the Denver Costcos, or much organic produce that is not frozen.

Regarding HDMI cables, did you know Comcast gives them to you for free? I was just told this a Comcast rep.

Reply
- Mr. Money Mustache April 25, 2013, 9:24 pm
  
  Comcast? Wouldn’t I have to have TV service for them to give me free TV cables? You do know we’re not TV watchers on this blog, right? ;-)
  
  http://www.mrmoneymustache.com/2011/05/06/mmm-challenge-cut-your-cash-leaking-umbilical-cord/
  
  Reply
Janson April 30, 2013, 2:53 pm

It’s hard to figure the “all-in” price on a banana, but I appreciate how comprehensive the MMM effort was on this shopping trip. And on the site. What an extraordinary resource!

Your math (and savings) look great, and really I just want to try out another idea on you:

On my daily bike ride home I stop into a Safeway three blocks from my apartment. I buy anything I’ll use in the next few days and add anything that’s 50% or more off the “normal” price that I can use over the next few months, including perishable stuff that I’ll freeze or pickle. For example, bacon, usually $5.49 lb in my store, goes for 2/1 every couple weeks, occasionally better. unlike Costco, Safeway seems designed to extract very different premiums from people of very different cost sensitivities (with constant and variable sales (even changing hourly), coupons, membership cards and other hateful crap – which ends up with poor people subsidizing not so poor me). And because I’m stopping in every few days, and I buy so little processed food, I can take advantage of seasonality, buying what’s cheap and in “season” (whether locally or in New Zealand or Ecuador) instead of what’s on my “list.” I should add that I buy a whole fancy cow or pig with friends every six months at a below retail $/lb price, so I’m not buying much meat at Safeway either.

Not only do I not spend a lot of cash on this, more importantly I spend very little time or effort. For example, if there’s a queue at Safeway, I don’t stop pedaling. Plus, I get to say hello to the checkout clerk, Maria (and several others who know me by name), who have been working there longer than the six years I’ve been going. This urban Safeway has no parking, except for bikes, by the way, and for some reason, it’s cheaper than another Safeway a mile away. The closest Costco is accessible, as far as I can tell, only from a highway.

So when I read your post, I wondered where did add back your 15 cents/mile car depreciation/gas/life risk (I know you were going that way anyway, but what about 30% of the loaded trip cost)? What was the value of the extra time it took? Your inventory carry costs (the opportunity cost on the $266 you’ve parked in food that you won’t benefit from until the second and third month) and the monotony that comes from buying in bulk?

Finally, you say you bought good deals at Costco and then checked the prices at Safeway. What would happen if you reversed that: bought cheap stuff at Safeway and then tried to find the price at Costco?

Obviously, you are really saying that Costco is a great part of a cost-saving food buying strategy – but that you still go to Safeway sometimes. And I’ve been to a Costco before, maybe even twice.

Fully loaded with all that car-ness, I just have a hard time believing that it’s 41% cheaper than my approach at Safeway. Of course, if MMM says I need to buy a car to save money, I will…

Reply
Joe May 2, 2013, 9:18 am

I once had a membership to Costco, but I didn’t see the value in it, and didn’t renew. Thanks for crunching the numbers and shedding some new perspective on shopping there.

I’m a single guy, no kids, living with a roommate (food is purchased separately mostly). I could try to get him to share the cost of membership. However, a search on Google revealed a loophole…non-members can use gift cards from Costco for purchases. I have another family member that has a membership, and I’ll get her to buy me a few gift cards. Anybody here try this? It might be a useful way to put off from renewing your membership every 12 months, at least. Buy the gift card on your last month of membership, say for maybe 3 months’ value of groceries and merchandise. That way you only have to renew every 18 months or so.

Reply
rockermocking May 6, 2013, 4:50 pm

I am the biggest Costco fan and I saw this post linked from another blog. I don’t know if you know this but Costco also has a fabulous travel agency. It’s not the cheapest but their trips are fully guaranteed and backed by Costco. My fiance and I booked our honeymoon, a 6 night, 7 day trip from New York to Jamaica in September at an all inclusive resort for $2,400 for both of us, flight included. This includes all the tips and airport transportation. If you ever are planning a special trip, I really recommend checking them out first to see if they have an option that works for you.

Reply
- Mark May 7, 2013, 12:16 pm
  
  Your helpfulness is always applauded. But I think you mistake the audience of the blog. I highly doubt anyone who reads this blog is going to be taking a $400 per day vacation!
  
  Reply
  - Rockermocking May 7, 2013, 12:18 pm
    
    Oh yes, most people, (ourselves included) wouldn’t take a vacation that nice, except for a special situation, like a major anniversary or honeymoon (like I mentioned ours is for our honeymoon). Even frugal people can save up years for a nice vacation and doing such doesn’t mean they’re not being frugal.
    
    Reply
Dapper Dan July 31, 2013, 4:07 pm

I got inspired by this post (a bit late, I suppose) and did a similar comparison to a bike-based trip to Trader Joe’s this morning. Mind. Blown. $78 worth of stuff at TJs would be $115 at Safeway (!)

Full numbers are here:
http://oilies.com/?p=1659

I’m still shaking my head and thanking my lucky stars that I’ve lived close to a Trader Joe’s for the past twelve years.

Reply
- KF October 5, 2014, 9:41 am
  
  Our local Trader Joe’s is a nightmare to drive to – surrounded by one way streets with loads of traffic, difficult entrances, and the parking lot is consistently packed full and very stressy. Even though products are overall much cheaper and better there, I’ve found myself going to our local rip-off grocery store a lot more often over the past few years, because it’s more convenient, and I just couldn’t stomach the idea of getting in the car and dealing with the hassle of a Trader Joe’s trip…
  
  …to a store that’s [checks Google Maps] 2.1 miles from my house. And a mere two blocks off my bicycle route home from work. Good grief. Yes, I am currently punching myself in the face.
  
  Ok, I’m bringing an extra pannier and a few bungee cords this week and loading up!
  
  Reply
michelle August 2, 2013, 3:29 pm

My mother and I are sharing a Costco membership, she has a card as do I. We’ve signed up for the executive membership which gives you a store rebate at the end of the year which between both of our households, pays for our membership.

Recently, we had to buy tires. After checking everywhere, Costco beat the competition by $200(this included install, free tire rotation & service…etc). When I went to buy them, the Tire Service Tech told me to wait for 15 days because there would be a $70 coupon in the next coupon book. So we saved $270+ on a set of 4 tires! And now, with our commitment to riding our bikes everywhere and drive less, those tires should last us many years to come!

Reply
walkermama October 11, 2013, 4:31 pm

Have you tried making your own vanilla extract? Super easy. No gluten if you use grape vodka or schmirnoff. The kind I was buying-McCormicks-has water in it even though it says 100% Pure. LOL. The homemade stuff rocks. And the price rocks too!

Reply

Next Comments

To keep things non-promotional, please use a real name or nickname
(not Blogger @ My Blog Name)

The most useful comments are those written with the goal of learning from or helping out other readers – after reading the whole article and all the earlier comments. Complaints and insults generally won’t make the cut here, but by all means write them on your own blog!

Is a Costco Membership Worth The Cost?

Want More?

Get MMM Automatically By Email

Leave a Reply

connect

welcome new readers

Love, Mr. Money Mustache

latest tweets

As Featured In…

Is a Costco Membership Worth The Cost?

You might also like:

Want More?

Get MMM Automatically By Email

Leave a Reply

connect

welcome new readers

Love, Mr. Money Mustache

latest tweets

As Featured In…