Costco is one of the biggest retailers in the world, known for its great deals, but rivals such as Walmart and Aldi also offer competitive prices, putting Costco’s brag of the best deal at risk.
Costco uses a modified high-low pricing strategy. This strategy involves lowering the cost of some items while raising the price of others. It is meant to attract shoppers with low prices, who pick up higher-priced items as well. Still, many Costco items are sold at discount through bulk or wholesale, aligning with Costco’s mission statement of offering services at the lowest prices.
This is possible because many suppliers cut deals with Costco to reach its large customer base. The store also offers a limited variety of brands, increasing competition among suppliers hoping to have their products on Costco’s shelves.
In addition, the retailer cuts expenses to save their members money. This revolves around forsaking advertising and sticking to bare-bones displays in warehouse-style stores.
Aldi Comes Out on Top
I recently put Costco to the test and found that it isn’t necessarily the place to shop if the consumer’s goal is to save as much money as possible on food and other items typically found in grocery stores.
Costco mainly falls short in the produce department, where shoppers are unable to buy in bulk. Costco’s prices, while often similar to Walmart’s and Aldi’s, are rarely cheaper.
For example, Aldi was selling bananas at 45 cents a pound, beating Costco and Walmart by 5 cents a pound. Aldi charges 19.7 cents per oz. of spinach, edging Walmart’s 19.8 cents per oz., and easily beating Costco’s 22 cents per oz.
The prices for 2% milk and eggs were also compared. Costco supplies its own Kirkland Signature milk for $4.13 a gallon. Walmart offers a gallon of 2% for $4.53. In comparison, Aldi’s price was $3.48. A dozen pasture-raised eggs go for $5.92 at Walmart, $4.495 at Costco, and $3.48 at Aldi — chalking up another win for having the cheapest price on a family staple.
Moving onto meat, a fresh whole chicken costs $1.49 per lb. at both Costco and Walmart. Meanwhile, Aldi had it at $1.29 per lb. However, Aldi’s pork chops were the most expensive ($6.95 a pound) and nearly twice the price of Costco’s, which were $3.49. Walmart’s pork chops were selling for $6.08 per lb.
In regard to grains, prices for white rice and whole wheat bread were compared. Whole wheat bread was cheapest at Aldi, going for $.093 per oz., while Costco charged $.12 per oz., and Walmart charged $.186. Rice is where Costco’s bulk buying tactics shined, offering a 25-pound bag for $11.99. This breaks down to $.48 per lb., crushing Aldi’s price of $.88 per lb. and Walmart’s rate, decreasing as the total pounds increase, of $1.04 per lb.
Two commonly bought items, paper plates and disinfectant wipes, were compared. Paper plates were offered at similar rates, sold for 6 cents each at Aldi, 6.9 cents each at Walmart, and 6.3 cents at Costco. Costco had the cheapest disinfectant wipes, selling them for 3.7 cents per wipe. Walmart sold the same for 7.5 cents per wipe, and Aldi offered a rate of 4 cents per wipe.
Overall, Aldi provided the top deals. However, for items that can be bought in bulk, Costco is the best bet. It tends to offer non-perishables in much larger packages, helping big families and those with ample storage to save money.
How to Get the Best Deals at Costco
To help ensure that you are getting the best deal at Costco, take a close look at the price tag. Costco has a pricing system that allows customers to know whether an item is retail price, wholesale, discounted, etc. This is all indicated by the ending digits on the price tag.
Items ending in .99 or .98 are retail prices. This indicates that Costco did not receive any special deal from the supplier, and the price is likely similar at other stores.
Products ending in any variation of .x9 — except .99 — are manufacturer deals. Costco must have received a special deal on these items and thus can offer a lower price to customers. This means you are saving money on these items, especially if you buy in bulk.
Prices ending in .00 or .88 specify an inventory dump set by the store manager. These items are generally returned, damaged, or bought as a one-off by the store. They are heavily discounted to move them out of the store as quickly as possible.
In addition, you’ll want to keep an eye out for an asterisk in the top right of a price sign. This is an indication that the product is discontinued and needs to be sold as quickly as possible, It also means that the product will not be available again anytime soon at Costco.
Bottom line: The keen competition between retailers benefits buyers, and customers who shop around get the best deals of all.