Is Costco a Good Deal or Not - Check it Out!

By Kara at Practicalsaver.com- Link to her story

What I have learned from my Costco research  . . .

Price, sizes, memerbship fees and quality are all factors that made it incredibly challenging to determine what is a good deal at Costco and what isn’t.  But here it is . . .

Here are a few issues you will want to consider:

Membership rates per year:  Individual $55, Business $55, Executive Membership $110

You need to have roughly $5 in savings per month in order to justify the membership.

Executive membership gives you 2% rebate on all in store purchases and prescriptions (excluding tobacco) and does not include fuel.  You would need to purchase $2,750 in-store per year to make the added membership pay for itself (that equals $230 per month).

It pays to have a Costco American Express Card, you get cash rebates on your purchases.  The rebates are even higher on Costco fuel.  There is no annual fee for this card as long as you have a Costco membership.  Although, it will only save if you pay it off each month, interest charges will eat up your rebate quickly.

Coscto will take returns on everything, even without a receipt.  This includes half eaten jars of peanut butter. They have an incredible satisfaction guarantee on all purchases.  The only restriction is 90 day limit on TVs, computers, cameras, and cell phones.  

Costco fuel not as big of savings as you may think.  If you purchase half of your fuel at Costco at a savings $.05 per gallon over other fuel stations, you drive 15,000 miles per year, and average 16 miles per gallon - your annual savings is only $23 per year.

Prescriptions - you do not need to have a membership to get Costco prescriptions.  They have great prices on prescriptions.

Watch for coupon books in the mail, they arrive each month.

They don’t take manufacturer coupons

Instant rebates often appear on products.  These are instant discounts that are taken at the register.  These rebates are not advertised but tend to run for an extended amount of time.  If you see a rebate, share the news, tell me and I will share with others.

Thoughts on Costco from readers . . .  

I’ve found that for organics Costco is the cheapest and I can generally buy organic items for roughly the same price as conventional items at the grocery store or Wal-Mart.  Costco enables my family to eat these items and still stick to our budget.  I used to buy their organic peanut butter, but they have discontinued it so now I buy their natural pb. -- Heidi P.

If you end up throwing half of it away, you’ve lost all benefit. -- Julie W.

You really have to be on your toes at Costco, prices go up and down from day to day. -- Vickie P.

Facts about Costco that will amaze you

source:  huffingtonpost.com

They offer 4,000 items (Walmart offers 100,000)

No items are marked up more than 15%, their revenue is made from memberships.

They sell $300,000 of cashew each WEEK, buying up half of the world’s supply

They sell 100 million hotdogs at food court each year.  Same price of $1.50 since 1985.  They make their own hotdogs.

90% of members renew each year.

Sells billion rolls of toilet paper each year

GREAT Priced Items at Costco  

These are items that would be worth planning a regular shopping trip to purchase.

Baby Formula they sell Enfamil (52 oz. $43) and Similac (34 oz. $31)
Coffee Beans are $.36 per ounce.  Dunkin Donut brand is a significant discount from the grocery store.
Cooking Oil is $1.79 per quart.
Food Court Most popular is hotdog and soda for $1.50
Garbage Bags.  Over half the price of grocery store prices.  One box off 200 should last all year.
Ink - new and refills.  You can refill cartridges for $7.99 or $9.99.  New HP56 sold in 3 pack equals $17.50 each.
Natural and Organic Products large selection at prices better than most stores
Olive Oil is $.09 per ounce
Rice, bagged 25 lbs.  storage may be an issue, almost 75% discount from grocery stores
Romaine Lettuce sold in 6 pack
Sheet Cakes from bakery.
Spices, a significant savings
Spinach 2.5 lb bag for $4
Syrup - 50% discount over grocery stores
Tortillas - sold in 40 ct., equals $.75 per 10 ct.
Vinegar - sold in 5 qt. bottle

GREAT at Costco If you have A Coupon or Instant Rebate.  

Wait to purchase with coupon or rebate, otherwise they are only ‘good’ prices.

Huggies Diapers.  $.15 per diaper with a Costco coupon.  The Kirland diapers were the same price, but didn’t have
a coupon available during research.
Laundry Detergent  Tide and Gain have coupons available at different times.
Over The Counter Medicine such as Zyrtec, Zantac, Allegra
Take and Bake Pizza from deli these are HUGE pizzas, with coupon they are around $6
Toilet Paper.  Their rolls are different size than grocery store.  You need to compare square foot. (still buy at
grocery store if you can get it at $.16 or less per single roll at the grocery store)
Vitamins Generic and name brand

GOOD Price at Costco

A sale at a grocery store can sometimes be a better

Batteries equals $2.53 per 24 pack
Bottled water
Butter -  1 lb. is $1.93
Canned tomatoes
Cheese, shredded.  Sold in 2.5 and 5 lb. packages.
Equals roughly $1.15 - $1.20 per 8 oz.
Contact Solution.  3- 16 oz. bottles $9
Dinosaur Frozen Nuggets 5 lb. box
Dog Food  Incredibly hard to compare quality between
brands.
Eye Glasses Starting to take vision insurance
Frozen Berries.  Sold in 4 lb. and 6 lb. bags
Generic Over The Counter Medicine such as
Zyrtec, Zantac, Allegra
Gift Cards - during holidays gift cards are sold for a
discount
Milk
Nesquik Chocolate Milk Mix
Nuts
Oatmeal, sold in 10 lb. box
Pancake Mix - 10 lb. bag for $6.50
Photo Finishing
Top Ramen $.15 each

NOT GOOD Price AT COSTCO

Usually can find a better at the grocery store

Bottled Juice
Bread.  They have a pretty good price, but with the
discount grocery store and dollar store options
$1 per loaf is a good price point.
Cereal
Chicken breasts, frozen or fresh
Deodorant
Dressing
Eggs
Hot Pockets
Ice Cream
Orange Juice
Paper Plates
Pepsi and Coke
Toothbrushes
Toothpaste

TOP QUALITY at Costco

These items are hard to compare price.

Canned Chicken, a 12.5 oz. can is roughly $1.85.
Meat beef and pork are reported to be delicious but
can be pricey
Rotisserie Chicken they sell 55 million of these a year

Kara’s Opinion and Costco Shopping Strategy

My eyes were opened to new money saving options that I didn’t know existed at Costco as well as items that weren’t as good as I thought.

Unless you are a large business, I wouldn’t pay for the Executive membership.  

I am going to watch the coupon books closer now using this research report as a reference.  

I will plan trips every other month stocking up on items from my GREAT list.

I will ALWAYS watch for sales at the grocery store, Costco is a good deal, but isn’t budget friendly.  We have $65 cash each we for groceries, it doesn’t take long for that to disappear on one trip to Costco.

I will look closer at clothes and books for items with instant rebates.