Does Shopping at Costco Actually Save You Money?
Many people know about the large corporation named Costco Wholesale Corporation. It technically began in 1983 after another company, Price Club, started the idea of a membership-based warehouse store. At the conception its name was simply just Costco. In the year 1993 these two companies, Price Club and Costco, merged to create PriceCostco. Four years later this name was changed to Costco Companies, Inc. Two years later in 1999 it became as we know it now; Costco Wholesale Corporation. (Costco: About Us) purchase a membership to shop at their locations. What does this mean though? Why is this a requirement for you to shop there? It is because being a Costco member, they will send you lots of coupons that are convenient and useable. They offer a very large selection of food items, household appliances, and almost everything else. The only question you must ask yourself is if the price of purchasing a membership is worth the potential rewards. Such as 2% cashback on each purchase.
Perspective #1:
Source Number One is by The Globe and Mail. The article is titled; Will a Costco Membership Really Save You Money? Here’s How to Know. In this article it is laid out that the best way to see if this option will save you money is to do a trial run. It makes sure to let you know that Costco doesn’t offer one day passes or anything like that. But it lets you know an alternative option that might work just as well. If you have a friend with a membership, they can bring you with them the next time they visit Costco on a shopping trip. This can be a good alternative because it allows you to compare prices and see what products are offered. They let you know that it works best if you take this opportunity after a typical shopping trip at your local store. It is very helpful in the way that it tells you whether or not it makes sense to purchase a membership depending on how the products fit your family.
Perspective #2:
Source Number Two was written by Deirdre Mundorf, posted by Tasting Table. The article is titled “How to Save Money Buying Groceries from Costco”. This article strongly advocates for why shopping at Costco can be beneficial. As well as giving a lot of pointers on how to exercise the use of your membership to the furthest extent of your ability. In her article she has 16 subheadings each with a detailed paragraph below explaining how your money and membership can best be put to use. These subheadings cover pretty much every area of Costco. The first few, in order are: “[O]pt for Kirkland Signature products, when possible, split bulk quantities with a friend or family member, don’t walk past the rotisserie chicken, schedule shopping trips after major holidays, always check the coupon book – and stock up, when possible, ask for a price adjustment.” (Mundorf) Overall, it is quite a descriptive and cumulative article. She talks about her journey, and many of the tricks that she has found work very well for her.
Perspective #3:
My last source, Number Three, is by Kimberly Palmer and her article is published on the website U.S. News & World Report. It is titled “Does Shopping at Costco Save Money?” It starts by saying that, if you are a member and frequent visitor to a membership style shopping warehouse, then it’s possible you are not actually saving as much money as you think you are. Her article goes over how people often end up spending a lot there on items that they might not need, use, or have space for. Due to the bulk size of Costco’s products, there is a likelihood that the items, food related at least, expire before they can be used.
Pros:
Costco’s biggest standard is that no product is marked up more than 3% over stock price. That means they only make you pay three percent over what they bought if for. Most grocery stores will charge between 10-20%. So, there is a huge difference in cost there. Costco is a great place if you are shopping for parties or major events. Due to the fact that they sell most every product in bulk capacities. Coupled with their broad range of products including; groceries, appliances, furniture, household goods, even auto care, and gas. For these reasons it makes it easier to make your Costco run the only trip you need to take for your, nearly, every need. Costco also has a Pharmacy, an Eyecare Clinic, Automotive services and Tires, fuel pumps, and a Bakery. Another fun, and helpful, little service they have is they offer samples of many of their food products. This can allow you to try some products that you might have been interested in. Or, even take home a new favorite. Another service they offer is their food court. This is great if you have a busy day of shopping and need something quick to munch on or need to sit and enjoy a meal. Their main food items are pizza, hot dogs/sausage dogs, sandwiches, chicken bakes, and Chicken Cesar salads. Their desserts include ice cream sundaes, latte freezes’, and cookies. Depending on the location they might also have some different food options. For drinks they have Pepsi fountain drinks. Depending on what level of membership card you have chosen, you may receive cash back rewards at the end of a certain time period. I believe it is annually. These rewards usually only come from the highest level of membership. Fortunately, either level of membership allows you to shop at any location in the country. (Costco.com)
Cons:
Well first let’s assess the situation, of course there is the base requirement of purchasing a membership in order to shop at their locations. There are multiple choices but I believe there are only two levels of cost. A 65$ option and then a 130$ option. Another issue with Costco is due to their bulk shopping some products may expire before they can be used. So, although it is great for large events or occasions, they may not be as convenient for everyday use. Other cons would be not always having the same products. Although most of their products stay the same, sometimes you can no longer find something that has become a staple for your household.
Strengths and Weaknesses:
Some of the strongest points made were in the article by Deirdre Mundorf published on the Tasting Table website. This is because her writings were very comprehensive. She listed many different reasons for why Costco is the place to go. For grocery shopping, for lunch, for a full tank. She basically just outlined a run-through of her typical Costco run. Deirdre has a lot of points that only apply in certain circumstances, this seems like a weak point until she has a paragraph offering an explanation that; these might not work for everyone, but if they do apply definitely consider using them. The second article does a good job of giving numbers and statistics. However, a less positive side is that it is very objective. It says that almost everyone who chooses to shop at a membership store ends up spending way more than they should. As well as “behaving irrationally in response to membership fees” (Harvard Business School) The last article also does a good job of using numbers. They really only offer two points in their article that are applicable for most people. They have pretty strong language usage. But some of what they say is very broad.
Similarities and Differences:
All three authors agree on one thing. Costco can save you money. This however, quickly becomes subjective. The one by The Globe and Mail, as well as, Deirdre’s article, both warn that Costco can end up costing more than you were expecting. They still retain their view though, that a Costco Membership card will be saving you money. This is different from Palmer’s article, she states that more often people will end up losing money because they assume that the membership is worth it.
Compromise:
I think it is best summed up by saying that Costco is a tool. If used properly it can be a great benefit for your grocery and most other needs. However, it can also be used incorrectly. I think the most beneficial way to tell is to do what you can to test it. Whether this be following along with a friend when they go. Or just getting a base membership and trying it for a year. Either way you must use this opportunity to the fullest. Make sure you go prepared. Don’t go hungry or make impulse purchases. See if it makes sense location wise to be your primary grocery store. At the end of the day though Costco can be a great opportunity to hit up a large selection of goods with a lot of deals nearby. With its development through the years, it really has now become a true glory to behold. With locations in many different states, and great deals daily, it has become a force to be reckoned with. In a good way.
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