Costco Wholesale is a global phenomenon that has helped revolutionize the way consumers shop. With a mix of utility and luxury goods in massive quantities and a warehouse setting, the Washington-based giant has implemented an entirely different method of shopping compared to traditional grocery or hardware stores. For customers who are looking to buy in bulk, Costco is the place to go. It has some of the best deals on the market for specialty items, and a plethora of customer-favorite products that keep buyers coming back.
The superstore is an unconventional retailer in many ways, one being that only members have access to shop in Costco stores. Membership fees range between $60 and $120, and, in 2020, the company boasted a whopping 105.5 million members according to Statistica. This fee is the key to the success of the business: in 2018, Costco collected $3.1 billion in membership fees. Although consumers do not typically have to pay a fee to shop in big-box stores, Costco’s membership fees often pay for themselves with the money members save.
The $120 premium membership has a rewards feature with two percent annual cash-back for customers. To cover the expense of the executive membership solely through cash-back, customers must spend $6,000 annually. While this may seem like a massive expense, the average American household spends $7,203 per year on food. Also, for a small restaurant that has hefty food costs, $6,000 could easily be spent in a year. Furthermore, Costco’s lower product costs create additional savings once the break-even point has been reached through cash-back. For customers who plan to spend significantly less than $6,000, the standard $60 membership is much more practical.
Rotisserie chickens, toilet paper and wine are some of Costco’s most popular items due to their quality and prices. Rotisserie chicken sales are a money-loser for the stores, but a win for consumers at just under five dollars. This practice of keeping customer favorites at a low price is part of Costco’s business strategy. Two other famous examples of this are product sampling and the $1.50 hot dog and soda combo from the food court. These amazing deals incentivize people to go to Costco, and the business’s hope is that customers will buy other items before they leave. There is a reason that the rotisserie chicken is sold opposite the entrance. To truly get the best use of a Costco membership, embrace these deals, but be aware of the add-ons that could ensue.
While a few products are known favorites, there are many other items that make a Costco membership worthwhile. A lower-cost, but high-quality line, Kirkland Signature, is the manufacturer of many Costco products, as it is the store’s generic brand. Kirkland Signature offers most common consumer goods but in quantities much larger than the average store. For example, Kirkland Signature Organic Blue Agave is $10.49 for 72 ounces of syrup. Safeway’s brand, O Organics, offers Organic Blue Agave for $5.99 for 16.2 ounces. Costco’s cost per ounce is $0.15, while Safeway’s is $0.37. To put this in perspective, to buy 72 ounces of the O Organics Agave, a customer would have to pay $26.62, about $16 more than Costco. Olive oil is another great example of Costco savings. Kirkland Signature Extra Virgin Olive Oil is only $0.50 more than O Organics Extra Virgin Olive Oil, but the Costco quantity is twice that of Safeway.
Although Costco has demonstrated its greater value and lower prices, it is important to note that savings come with larger quantities. For a family that uses olive oil every day, buying from Costco makes the most sense, but not everyone needs a two-liter bottle of olive oil in their kitchen. If a customer does not consume large amounts of a product, a regular grocery store might fit their needs more than a Costco membership. To truly benefit from Costco, a consumer’s savings must outweigh the cost of their membership.
For families, small businesses and die-hard fans, a Costco membership is a worthwhile purchase. Costco offers high-quality goods at low prices, and the savings speak for themselves. Costco’s samples and rotisserie chickens are some of their most beloved perks, but the company also offers a multitude of other popular items that keep customers coming back. Costco boasts some of the market’s most satisfied customers, which is no surprise due to the company’s stellar customer service. For consumers who are searching for a company that will provide high-quality goods while also saving money, buying a Costco membership is an excellent idea.
