124 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.

ItemCostco CostSafeway CostCostco Savings
TOTAL401.48690.67283.16
Quaker Oats - 30 lbs in the form of 3 10lb boxes20.67 45.00 (and this happened to be during a major sale)24.33
Toilet Paper (100% recycled) - 32 double rolls14.6917.33 (but no recycled TP available)2.64
Blackened Wild Salmon Filets - Frozen - 2.25lb15.9929.9713.98
Organic espresso roast coffee - 4 bags totaling 9 lbs48.0075.96 (that was the cheapest wholebean coffee in Safeway. For equivalent quality, more like $100+!27.96
18 organic eggs3.695.982.30
3 lb organic beef burger patties15.9923.977.98
2 lb Kalamata Olives, fancy6.7911.975.18
4lbs frozen mixed blueberries/raspberries10.9919.208.21
2lb sliced various kinds of cheese (party style)8.9912.003
8.5 lbs (4 x 2.1lb bags) Quaker Natural Granola15.9821.805.83
300 generic-version-of-flintstone kid vitamins12.9917.50 (happened to be 2-for-1, normal price is double this)4.51
32 oz pure maple syrup12.9919.997
4 lb thick sliced smoked bacon14.9919.964.97
2 lbs roma tomatoes3.993.990
16 dry erase whiteboard markers (for our little artist)9.9916.00 (Staples price)6
3 lbs Boulder natural sausages7.1918.8311.63
6lbs Whey protein powder (for the weightlifters in the family, also supplements protein for fussy eating boy)39.9959.9920
3 lbs Coleman organic chicken breast18.4523.975.52
2lbs colby jack marble cheese5.997.992
2.4lbs smokehouse roasted almonds8.9919.1810.19
9 lbs (!) raw unsalted almonds29.3745.0015.63
1.13 kg organic tortilla chips4.3912.007.61
5 lbs shredded mozarella cheese for pizzas12.99207
4 pack men’s merino wool hiking socks10.9917.00 (target price)6.00
16oz pure vanilla extract6.8919.9813.09
3 lb Pico de gallo salsa, fresh5.49no yumminess equivalent, closest is Newman’s Own at 2.69/lb = 8.072.58
2 lbs smoked turkey slices, fancypants11.9915.983.99
303 grams ground cinnamon2.659.00 (6 x 50g containers, on sale)6.35
3.5lbs dark bittersweet chocolate chips (70% cacao)9.7913.954.16
2 lbs active dry yeast (for bread and pizza making)4.1543.12 (5.39 for a 4-oz jar!? what the fuck, safeway?)38.97
32oz extra virgin olive oil5.4415.9910.55

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.

 

  • David Hughes October 15, 2013, 8:58 am

    I just discovered MMM two weeks ago and I’ve been diving in for the Maximum Mustache. I’ve long been a member of Sam’s Club, but have to be careful to avoid waste. Now that I have a grocery spreadsheet, however, I think I can maximize savings while having zero waste.

    Costco just recently came to my area and I’m heading out there later in the week because most people I know have switched from Sam’s or own “dual citizenship” because they like the different selection.

    What I wanted to share, though, is for readers in my area (SE Wisconsin): Woodmans. That store is a godsend. It offers, in most cases, a full grocery store with excellent organic and specialty foods and a cost equivalent to Sam’s or – heck – even beat ALDI in many cases.

    Reply
  • Robert November 4, 2013, 6:55 am

    Just another plug for Costco giftcards. In my case, I wasn’t getting enough use from my Costco membership to justify it but do like to get a few items there. So after a few years of membership, I decided not to renew. I bought 10 giftcards before my membership expired, and can use these for the next few years (2-3 times a year) and then can buy another membership when they run out.

    Reply
  • Scott January 26, 2014, 3:14 pm

    Love this post AND the many comments. I also used to HATE shopping with my wife at Costco (it was her thing), but I intuitively began to sense that we were saving TONS of $$ on our staples, and am so thrilled to see it laid out in dollars and cents like this. BECAUSE, just as important to me now, is supporting a business like Costco where its employees are happy, well-paid, insured, and NOT WORKING ON HOLIDAYS!!! Awesome.

    Reply
  • Rosalind Perry February 2, 2014, 12:52 pm

    Is it necessary to have shared residence to be able to share a membership card with another person?

    Reply
    • DT007 February 5, 2014, 1:02 pm

      Yes, it is necessary. I’ve been leeching off my mother’s membership since 1997 when I was still living at home and she kindly shared her membership with me. When I thought I’d lost my card, I would have been SOL – I tried to get a replacement, but had to show proof of address. Luckily, I found the card in a coat pocket (obviously a coat that should have been sold or never bought in the first place as I would have found the card sooner had I worn the coat frequently).

      Reply
      • Logan September 21, 2014, 11:35 pm

        Not so. I have an executive membership, and have an extra card for my partner who lives on the other side of town. Only I can update membership cards as I’m the primary account holder, but him living elsewhere had no bearing on getting him a card on my account. Although he was able to get an AMEX/Costco card in his name the Costco account is still through me. Plus our spending habits do not impact each other, his spending does not apply towards my yearly executive cash back bonus coupon, and mine doesn’t impact his AMEX cash back rewards.

        Reply
  • C February 15, 2014, 2:21 pm

    I got a Sams membership as a gift and also had a family member with a Costco card. Because I find comprison shopping to be a sort of fun activity, I held onto a lot of receipts and compared unit prices of everything. I found that frequently my local “everyday low price” super market (Shop Rite) had better prices on things like tuna and oatmeal than any of the box stores or WalMart. I do think some items (nuts, e.g.) were just better quality at Costco than in other places. I also found that some items were cheaper in bulk from Amazon, and with free shipping, there is no gas or time spent “charge.”
    I do not have a big family to feed, so bulk of perishables usually means waste to me- though I did eat 6 peppers in one week, because they were a good price, 1 or 2 from the grocery store would have been easier to deal with- eating those peppers before they spoiled was a project in itself.

    Reply
  • Stephanie April 9, 2014, 3:54 pm

    Good to see Costo is worth it and I buy a lot of the same things you do. Food is the one thing in my budget that I think it is actually important to spend a good amount on now to save me from healthcare bills later, not to mention keep me healthy and happy now and in the future. Also, the better the food I get for home the less likely I am going to be tempted to go out, and even “fancy” food at home is still cheaper and healthier than most restaurant food.

    I buy my meat from local farmers and keep it in a freezer in my basement. It’s more expensive than conventional or organic meat from Costco, but I get 1/4 grass fed organic cow at ~$7 a lb for a huge amount of steaks, ground, roasts, and nasty bits I like to eat because I’m a weirdo (liver, heart, etc). Plus if you buy a 1/4 cow you only need to buy it once a year. As an ex-vegetarian I have trouble supporting what happens in conventional animal husbandry no matter how much cheaper it is. Buying local means I can not only know the animals are treated well and the food is healthier but I’m keeping my money in the local economy. And here in Colorado we have some awesome local meat…hit me up if you want some info on good farmers.

    I still do Costo runs for other staples but I just think I’d rather wear all Good Will 50% off day clothes, only read books from the library, and get rid of my car altogether if need be as long as I can still eat my tasty local meat and CSA veggies when in season.

    When I was still vegetarian I lived off off quaker oats and pinto beans and rice with chili sauce, all bought from Costco. At the time I thought it was amazing how cheap you can feed yourself if you plan ahead, shop bulk and cook your own food. I think my food was probably $1 a day back then.

    Reply
  • Christy June 3, 2014, 8:41 am

    I have a Costco Executive Membership and use the free AMEX to get between 1-3% back on all my purchases. I know Costco saves me money, and I stick to a pretty basic foods list. The additional cash back on the Executive membership helps us come out even further ahead (after the additional membership costs). And we’re only a household of two — it still saves us!

    I’m a gardener and am pleased to often see great seasonal deals on everything from garden gloves to potting mix. I am also a fan of their clothes, which purchased strategically can enable a person to have a pretty slick wardrobe. My husband has found great dress shirts and wool blend slacks — requirements for his work.

    Although not often mentioned I do have to note their return policies, which are exceptionally good. We will need a new mattress soon and will go to Costco because it was highly rated in Consumer Reports. They deliver it and set it up, and (unbelievably) if we don’t like it they’ll pick it up.

    Reply
  • Woodrat June 30, 2014, 10:53 pm

    Thanks for all the tips about Costco and TJ. Will check them both out to add to our regular stores of Winco and Grocery Outlet. I recently discovered, by accident, the Dollar Tree, which no one mentioned above. I have not needed to replenish any of these items yet, but when I do, I will hit the DT for them : laundry detergent 64 oz, dish soap, bar soap (4 bars), assorted cleaning supplies, personal hygiene items like shampoo and toothpaste, some of them brand name, office items like envelops, packs of name brand pens, miscellaneous kitchen and household items…. Some of these items are in somewhat smaller than regular sizes, but most are the usual size. And even the smaller sizes end up a good deal at only $1. I purchased 3 bottles of an expensive moisturizer for my dry skin. The equivalent volume at regular price would have been $15 or more. The key is to not be distracted by junk (which will not be a problem for frugal folk). I had been under the impression DT carried only junkie useless stuff. There is plenty of that, but also useful items. And for only one dollar! Easy to track your spending at DT.

    Reply
  • Nathan the FFK September 10, 2014, 6:50 am

    We just got a membership the other day and the savings have been ridiculously impressive! Their eye exams are even a better deal. I pay $60 for a glasses exam while the other optometrists charge around $100! Same exam, better price. Awesome post!

    Reply
  • Logan September 21, 2014, 11:19 pm

    I have found the price of Bulk meat (especially beed brisket and pork shoulder) cheaper at Restaurant Depot than Costco. I also have an executive membership at Costco that more than pays for itself. Except for the meat, I buy all my food, paper products, cleaning supplies and gas at Costco, and I pretty much just shop for myself, no family. Aldi usually sells banana’s at 44¢/lbs. vs Costco’s 46¢ without needing to buy 3 lbs. of bananas at a time here in the Minneapolis, MN area. But I’ve stopped eating bananas since I switched to a high-fat low-carb diet and lost 50 pounds in the last year (actually I lost most of the 50 lbs. between October and April, and have been maintaining my weight lost through the summer of weekends and a few week-long vacations off the diet, but getting ready to re-engage the HFLC diet again for the next 50 lbs. I need to lose this winter.)

    Reply
  • Mark October 16, 2014, 9:20 pm

    Now pony up for the Executive Membership with 2% returns… not only does my membership pay for itself but I also get an additional dividend every 12 months!

    Reply
  • Mark October 16, 2014, 9:23 pm

    You like Costco and organic foods??? Time for a blog post about saving money with a CSA membership!!!

    Reply
  • Paul November 2, 2014, 12:35 pm

    MMM, can you post your regular list of essentials not just from this particular trip to Costco?

    Reply
  • Carl T. December 4, 2014, 4:18 pm

    Went to Costco today for the first time in over 20 years. OMG, what a horrible, awful, despicable experience. I don’t care how much I might save by shopping there. I will never go back. I value the experience of shopping for food. It’s a ritual. So much of what’s wrong in America is under Costco’s roof — obesity, cheapness, gluttony, rudeness, fluorescent lighting, stuffed animals the size of refrigerators, and perhaps as much plastic packaging as actual merchandise. Are these really the things MMM values? I’m sticking with the local (regional) grocery chain and the family-owned health food store, thanks.

    Reply
  • Marcella April 23, 2015, 11:30 am

    This post about the savings at Costco is interesting. However, in a rare departure from agreeing with everything Mr. Money Mustache has to say, I have to point something out here. Even though Costco may be cheaper, the impact of all the packaging makes it impossible for me to ethically shop there. The amount of plastic and other packaging of products there is a huge landfill dump. So I shop out of the bulk bins at the local food co-op (bringing my own jars and such), even though it may end up costing a bit more. We have been focusing on cooking at home from whole ingredients, and just got a share from our local farm.

    Reply
  • Maria July 22, 2016, 11:54 am

    A few months back, a Costco cashier forced an Executive membership on me, regardless of how many times I said no. When they sent me the new card, I went ballistic because I had made sure she removed it from the tab where she add it against my wishes. I called them up, and got apologies from the customer rep and the warehouse manager where it had happened. They sent me my old regular membership back, and I thought all was well. Wrong! Two weeks later, they sent me a new executive card again. That prompted me to start questioning whether I needed the stupid membership anyway. It may be true that some items are way cheaper, but the truth is that I don’t need to buy that many things in bulk and I end up spending over $100 each time I visit, regardless of what is on my list. Add that to the lack of respect to the customer, (seriously, that kamikaze cashier told me that I was like her mother and didn’t know what was good for me), and I’ve decided that paying for the privilege to shop is not for me.

    Reply
    • Mr. Money Mustache July 22, 2016, 1:15 pm

      Wow, pretty crazy story, Maria! If you care to share the exact store where this happened, somebody in charge might see this and make some changes to make sure it doesn’t happen to others. I’ve never had anybody push anything on me at Costco, for example.

      Reply
      • Paul July 22, 2016, 1:24 pm

        Costco can be very pushy when requesting up-grades to memberships when you check out. My wife and I would be pressured every time we checked out no matter how many times we told them no. We finally had to complain to the store manager. For reasons too long and complicated to explain here, despite what we spend at Costco, the upgrade was not worth it. No matter how many times we tried to explain that to the salesperson, we would still get the hard sell. It was very, very annoying. Once we complained Costco put some type of notice on our card and it stopped.

        Reply
  • Ernie January 12, 2017, 11:00 pm

    Is Safeway even a cheap store in the US? In Canada, they’re one of the highest-priced grocery stores around, so in my mind, this isn’t a fair comparison to say, the Real Canadian Superstore.

    Reply

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