Finally, PROOF That Costco Prices Are Cheapest

Not long ago I wrote an article discussing Costco’s membership fee and I asked readers if they believed the fee was a bargain or a scam.

I’m a huge Costco fan myself and most of you seemed to agree that the annual membership fee was a small price to pay for the benefits of being a Costco member.

But there were some people who were adamant in their belief that the fee is simply a scam to bilk consumers out of their hard earned money.  They argued that Costco prices are not always cheaper and that better deals can be found elsewhere.

My stance has always been that Costco’s prices are not always better (especially if another store has an item on sale and you can combine that with a coupon), but dollar for dollar the everyday values at Costco far surpass other stores.  There are certain items I will only purchase at Costco because I know the prices are much higher everywhere else.

Since discussions about Costco prices always seem to cause such an uproar I figured it was time to settle the matter once and for all.costco prices

My Costco Price Comparison

To me the argument in favor of Costco membership has always been that the money you save by shopping there outweighs the cost of the membership fee.  I set out to prove that by comparing Costco prices to those of three other stores (Target, Shoprite and Stop and Shop).

Why those three stores?

Quite simply, they’re all within a short drive of my house.

My first stop was Costco, where I roamed the store and marked down prices for about 20 different items in various consumer categories.  I tried to look for items and brands that I was sure other stores would carry so I could make a true apples to apples comparison.

After I gathered a price list from Costco, I visited the other three stores and did the same.  Unfortunately I had to drop a few items from the comparison because not all the stores sold them.  For example, Target doesn’t carry Premio Sweet Itailan Sausage.  I ended up with 14 items on my price comparison list.

Newman’s Own Coffee K-cups
Duracell Batteries
Pepperidge Farms Goldfish Crackers
Martin’s Hamburger Rolls
Folger’s Classic Roast Coffee
Reynold’s Wrap
Capri Sun Juiceboxes
Multigrain Cheerios
Huggies Pullups (4T/5T)
Ball Park Hot Dogs
Gillette Mach 3 Turbo Refills
Swiffer Wet Mop Refills
Tide Liquid Detergents

Size Does Matter (That’s What She Said)

Costco sells items in bulk so the unit size is almost always bigger than that found in other stores.  To make an accurate comparison I had to compare the price per unit.  I then took the unit price from the largest unit size available at Target, Shoprite, and Stop and Shop and used it to calculate an “adjusted price” that could be compared to Costco.

For example, Costco sells Capri Sun juice boxes in a package of 40, but the biggest size Shoprite sells is only 30.  That’s not a very fair comparison so I simply calculated the per unit price from Shoprite and multiplied by 40 so I could determine how much that quantity would cost at Shoprite.  That’s the only fair way to determine who provides the most bang for your buck.

To demonstrate, a 30-pack of juice boxes costs $7.49 at Shoprite.  That means the price per unit is 25 cents.  Forty times 25 cents equals ten dollars.  But at Costco, you can buy 40 juice boxes for just $6.99.

Likewise, Costco sells Ball Park hot dogs in a four pound package, but all of the other stores sell it in a one pound package.  To determine the “adjusted price” I simply multiplied the one pound price times four.

I did this same calculation for all 14 items from every store, and you will see this “adjusted price” for each store listed in the chart below.

ItemCostcoTargetShopriteStop and Shop
Total $244.26
Newman's Own Coffee K-cups$37.99
Duracell Batteries $14.99
Pepperidge Farms Goldfish Crackers $8.99
Martin's Hamburger Rolls $5.99
Folger's Classic Roast Coffee $11.99
Reynold's Wrap $16.59
Capri Sun Juiceboxes $6.99
Multigrain Cheerios $7.99
Huggies Pullups (4T/5T) $29.99
Ball Park Hot Dogs $9.99
Gogurts $7.89
Mach 3 Turbo Refills $48.99
Swiffer Wet Mop Refills $15.89
Tide Liquid Detergents $19.99

As you can see Costco prices don’t just beat the competition, they destroy them.  Every single item on the list was cheapest in Costco.

You can go to Costco and buy these 14 individual items and pay $244.26 or you can go to another store and pay a lot more.  The next nearest competitor was Target, but in order to come home with the exact same brands and quantities you’d have to shell out $314.05.  That’s a difference of $69.79…which is more than the annual price of the Costco membership!

Let me say that again…

This one shopping trip alone more than covers the of the Costco membership fee!

Everything else throughout the year is gravy.

Heading Off Arguments

I know my findings aren’t going to stop all the Costco haters from attacking, but let me at least try to head off a few arguments I can see coming.

This price comparison was completely unscientific.  It involved one guy walking around a bunch of stores and tracking prices.  I picked the items completely randomly.

The list is not meant to be all-inclusive.  Each of these stores sells thousands of items and comparing them all would require a lot more manpower than just me.

While you might be able to find some items that are indeed cheaper in other stores, I find it telling that every single item surveyed was less expensive in Costco.  The warehouse giant’s dominance in this price comparison suggests that it would come out ahead in a more exhaustive study as well.

Only regularly priced items were used in the comparison.  Coupons and sale prices vary so wildly and they change every week, making the regular prices a better point of comparison.  Costco doesn’t accept coupons cut from newspapers like supermarkets do, but they do offer their own coupon mailers and instant rebates to customers.  For example, the day I surveyed prices at Costco there was an instant rebate of $3 on Reynolds Wrap, but I used the regular price instead.

As you can see from the list, I only surveyed the prices of name brand products.  All stores have their own generic brands of various items.  Those items are almost always less expensive but the quality and volume will vary from one store to the other.  Limiting the survey to name brands allows a true apples to apples comparison.

Readers, I want to know what you think.  Do you shop at Costco already?  If not, will this price comparison change your mind at all?

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Mike is a freelance writer and blogger who specializes in finance and parenting topics. He is a dedicated husband and father of three who is obsessed with creating multiple streams of income and building wealth so he can achieve true financial freedom for his family. Like what you're reading? Subscribe to our free RSS feed and follow us on Twitter.

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  1. says

    I don’t shop at Costco but I would say that you are pretty accurate on the proof. I shop at Sam’s and the pricing for those two should be fairly close. We save a lot of money buying in bulk though we do spend a large portion time in separate and freezing the meats. Other then that the membership and prices are very worth it.

  2. says

    This not a scientific study but I will take this as face value. I think overall the prices are cheaper in Costco so I do think the membership fee is worth it in the long run. Unfortunately for me there is no Costco near my house so I don’t go there

  3. says

    You missed a good one – Photos.
    5×7 Costco $.39 / CVS $1.69, the 8x10s are $1.49/$3.99 respectively.

    The items I regularly buy at CVS vs Costco are Laundry soap, Toothpaste, Paper towels, and Toilet paper. But, only with a combined sale/coupon as you mentioned. I do my best to keep stocked on these items to avoid the higher price.
    Last to repeat your point – it’s unit pricing that’s key. And in some cases, being willing to have a bit extra in the pantry. Supermarket aluminum foil comes in smaller sizes at twice the cost per sq ft, so when that Costco flyer had the $3 coupon we bought 2x 2-packs, 4 rolls total, 1000sq ft. That’s good for 9-12 months.

  4. standardraiser says

    Good article. I am curious though comparisons between the bulkstores (i.e. Costco, Sams, BJ’s). Any thoughts there? I grew up on Costco, currently live in an area with only a Sams, but I am moving to an area that has all three. What are your thoughts between those?

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