For reasons that I just cannot explain I just love shopping at Costco! I don’t know if it’s the aisles and aisles of well stocked borderline gourmet stuff, or if it is the free samples they let me graze on while I shop. Or maybe it’s the fancy electronics that always seem oh, so within reach. But, overall, I really enjoy the experience. And no matter how good my intentions are before I start my shopping trip, when I walk out of the store I almost always have stuff costing at least $100 in my cart! So, I reckon if I limit my Costco sojourns to once every four to six weeks, I should do fine. Well, after last weekend’s trip, I decided to do a list to see if Costo was really saving me any money. Surprisingly (and a little disappointingly), I don’t think shopping at Costco is really saving me any money at all. I may get more stuff for my money compared to regular grocery stores (where I hate shopping, for the record), but when I consider the actual amount of money I spend, I probably spend more rather than less, when I shop at Costco. Here is my analysis –
If you are a small family, you are limited in what you can really buy at Costco.
Costco is a wholesale store. We are a family of two. For small families like us, practically speaking, it makes no sense to buy any perishable goods. What will I do with a 2lb bag of garlic or 10lb bag of apples? On the other hand, it’s a great place to buy non-perishable stuff in bulk. For example, my Costco shopping list usually consists of some of these items – soaps, body wash, body lotion, detergents, kitchen towels, toilet paper, frozen food, cereal, milk, multivitamins etc. I know I save a lot of money on these items. But the question is, does the quantity that I buy save me enough money to justify the membership fees?
Impulse buys at Costco cost way more than impulse buys at a regular grocery store.
Since it is a wholesale store, if you make an impulse buy, it’s usually in much bigger quantity than at a regular grocery store. That means that it costs more too. For instance, on my last shopping trip, I picked up a bag of pecans. On my way to the checkout line, no less. In a regular grocery store, this discretion would have probably cost me $5. But at Costco, it costs me $10. And when I brought it home, I realized that the quality is not all that great 🙁 So now, I am stuck with a big bag of pecans, I didn’t particularly like 🙁
Wrong product/brand/choice cost is much higher too.
Which brings us to the next point, at Costco, mistakes are expensive. Not just on impulse buys, but for items on your regular shopping list as well. And making mistakes, especially with the choice of a brand is relatively easy at Costco, since they stock only a limited type of brands. For instance, during one of my earlier trips to Costco, we wanted to pick up some cereal. I don’t remember if they were out of the particular cereal we were looking for or if we just felt very experimental, but we picked up the strawberry-yogurt cereal instead. I mean its strawberry and yogurt, so what’s not to like about it. Turns out, it’s a nice cereal, but I just don’t like eating it the first thing in the morning. Again, I am stuck with huge double box of cereal, and a nasty choice, eat it or waste it?
Some deals are not as good as they seem to be.
Finally, some deals at Costco are just not as good as they seem to be. Take for example, the gas price. Gas price at Costco is consistently 5 cents less per gallon, than the local gas stations in my area. If my gas tank is completely empty, it can take about 12 gallons, which works out to savings of 60 cents per tank. More often than not, I fill up much before my gas tank is completely empty. So my average gas purchase is around 10 gallons. That makes my savings 50 cents, per fill up. But, the closest Costco from my home is about 25 miles round trip. That’s a gallon of gas right there. With the current gas prices, it’s easy to see that I spend much more on gas to get to Costco and back, than I save on gas. Of course, I don’t go to Costco to just buy gas, but you get the idea, right? Usually, the number of Costco stores is a lot fewer than regular grocery stores. So, more often than not, a Costco trip involves at least a short commute. Add the gas price to the membership fees, and you’ve got to wonder, are you saving enough to justify shopping at Costco?
So, overall, here’s my conclusion. Unless you are extremely disciplined, you will likely end up buying at least a few items that you were not planning on buying anyway, and they cost you more at Costco than regular grocery stores. So, while you might get more stuff for the same amount of money by shopping at Costco, some of that stuff may not be what you actually need and so, Costco isn’t a very frugal place to shop at! For small families, the cost of membership could possibly well exceed the amount saved. So, if anything, for small families, Costco can be definitively anti-frugal!