Is Costco Worth It? Here’s What We Found Out

I’ve been a Costco member for over 15 years and I can’t tell you how many times someone has asked me “Is Costco worth it?”

I always answer the same way: YES!

There are plenty of items where Costco prices are just unbeatable, and some smart shopping will more than cover the Costco membership fee (see the table below for more details).

How Much Is A Costco Membership?

The standard Gold Star Costco membership costs $60 a year. An Executive membership costs $120 and entitles you to additional perks like 2 percent back on purchases.

That sounds like a steep price to pay just for the privilege of shopping, and I don’t blame you for questioning if Costco is worth it. I don’t exactly enjoy paying my annual fee when it comes due each year. But I always end up paying because I know I get my money’s worth.

Proof That Costco Prices Kick Serious Ass

Here we have a breakdown of a recent “stocking up” trip we made to Costco.  We usually do these a couple times a year to stock up on the staples that will last us for a while.

Obviously Costco carries bulk items in quantities that you can’t get elsewhere. So to give you the most accurate comparison I took the Costco price and divided by the quantity to get the price per unit. Then I calculated how much the same quantity would cost in my local supermarket (Stop and Shop). In other words, how much would it cost me to purchase the exact same quantity I bought in Costco.

The math speaks for itself.  In one trip to the store we saved $251.55!  That’s enough money to cover four years of Costco membership fees.

If that’s not a no-brainer I don’t know what is.

But wait, I already know what you’re about to say:

Mike, you handsome devil. You cherry-picked those items to only show things where Costco prices were significantly cheaper.”

Isn’t that what smart consumers do?

I don’t do ALL of my shopping at Costco and I’m not recommending you do so either.

Smart, frugal shoppers know they need to shop around for the best deals.  That’s exactly what I’ve done and this list is made up of the items I’ve found to be priced way better at Costco.

And I didn’t even mention Costco’s rotisserie chicken which they somehow sell for just $4.99. It is absolutely delicious and shoppers line up waiting for each batch to come off the rotisserie. Be warned: the smell will cause extreme hunger on the drive home!

Why Does Costco Charge A Membership Fee?

Costco follows a different business model than typical supermarkets and retail outlets.  While other stores earn all their revenue from the spread between the amount they pay for products and what they sell them for, Costco relies on their membership fees to maintain profitability.

Costco’s goal is to provide the lowest price possible for their customers.  That means fewer sales people on the floor and no shopping bags to lug home your stuff.

But it also means prices that are often significantly lower than you’ll find elsewhere.  There are several items (scroll down a bit to see the table breaking down Costco prices and my family’s savings) that my family only purchases at Costco because they are so much cheaper than at other stores.

Costco does put their money where their mouth is and they are even willing to drop a product if they can’t provide the best possible price to their customers.

Back in 2009, they actually pulled Coca-Cola products off the shelves because they felt the wholesale prices were too high.  Within a month Coke was back on the shelves at a new, lower price.

Costco is able to offer lower prices and better values by eliminating virtually all the frills and costs historically associated with conventional wholesalers and retailers, including salespeople, fancy buildings, delivery, billing and accounts receivable. We run a tight operation with extremely low overhead which enables us to pass on dramatic savings to our members.”  -Jim Sinegal, Costco’s Co-Founder and Former CEO

Common Costco Complaints

Now let’s review some more Costco complaints I’ve heard from all the haters out there and my own thoughts on each.

They don’t even supply bags for me to carry my stuff home. 

This doesn’t bother me at all.  Many of the packages are too big for bags anyway and it is easy enough to bring along a few reusable bags for the smaller stuff.

Or just toss a big plastic bin in your car before you head to the store. When you leave the store place your purchases in the bin and you can carry it right into the house when you get home.

Not providing shopping bags helps keep prices down and it is environmentally friendly too.

There are almost never any employees on the floor…good luck finding help if you need it. 

If you’re looking for someone to walk around and show you where to find everything, Costco probably isn’t for you. But personally I don’t like being bugged every 15 seconds by someone asking if I need help.

I just want to get in, grab what I need, and get the hell out as fast as possible.

Costco lets you shop in peace, but in my experience they are more than happy to help if you ask.

You’re forced to buy in bulk.  You’ll throw away anything that goes bad.

Savvy shoppers know that buying in bulk is usually cheaper than purchasing smaller versions of the same item.  Of course, you won’t save any money if products go bad before you have a chance to use them.

Larger families have an advantage here since they’re more likely to use their entire purchases in their family meal plan.

But smaller families and individuals can always shop with a friend or neighbor and then split up the bulk packages at home.

Prices are not always better than other stores. 

In my experience, the everyday prices at Costco are better than regular prices at other stores.  Of course, there are times when another store could have the same item at a cheaper price.

This is especially true if the item is on sale and you can combine a manufacturer’s coupon with a digital coupon from Ibotta.

It’s always good to consider the per unit price when shopping and compare prices before just assuming Costco is cheaper, but as I showed above there are some serious savings available at Costco if you do your homework.

So what’s your opinion?  Are you a Costco member?  Do you think the Costco membership fee is worth it?