Costco — Or How To Go Broke Saving Money

by Katy on October 25, 2008 · 18 comments


I remember my first trip to a warehouse club. It was 1985, and I was visiting my aunt Judithe in Houston, Texas. She was in love with her local Sam’s Club, and took us there to show it off. I’d never seen a store so enormous. To say it was Texas sized would be an understatement.

Fast forward to 1993. I’m now am a proud owner of a Costco card, and can now buy my own huge quantities, of well . . . just about anything. 

I enjoy the bi-monthly trips to Costco. We develop film there, buy our milk and eggs, and oh yeah . . . we spend a ton of money on impulse purchases. 

Save money on milk, waste money on muffins.

Save money on film development, waste money on some pretty flowers.

It was hard to get out of there without spending at least a hundred dollars!

Not to mention the food waste from having to buy such large quantities.

So we let the Costco card lapse a few years back. Our Costco store is actually pretty far from the house, and we weren’t going often enough to make it worth our while.

But my husband went into withdrawal and secretly renewed the card. He was sure that the few items we buy there would make it worth the yearly fee. 

Wrong.

The bagels, granola bars and other such impulse purchases reverse any savings we might have found. I think that the only way to make a warehouse membership worthwhile is to be someone who buys mostly pre-packaged foods, and that’s just not us.

I plan on letting the membership lapse again. Shhh . . . don’t tell my husband.

Do you shop at a warehouse store and feel you get your moneys worth? Tell us about it in the comments section below.

Katy Wolk-Stanley

“Use it up, wear it out, make it do or do without.”

{ 17 comments… read them below or add one }

Mary C October 25, 2008 at 6:36 am

The only way to ‘save’ any money at Costco is to make a list and only buy what’s on the list. If you wander even one aisle, that is impossible.
We call it the 300 dollar store. My husband likes to go for the hot dogs and to get gas, which is fine if you don’t actually enter the store. Yikes!

Reply

Emily October 25, 2008 at 6:40 am

I’ve never quite understood the problem with grocery ‘impulse buys.’ Ok, if you let the kids talk you into chocolate donut holes, the money probably would have been better spent on something else. But if you buy food you normally eat (and eat the whole package) then does it matter if it was on the grocery list or not? If Costco bagels are a good value and you freeze the ones you can’t eat right away, then does it matter that you have to buy 50 at a time?

I like shopping at Sam’s (Costco is too far away, but I like it even better) because I like buying certain things in huge quantities. I know there is always going to be TP and paper towels in the basement. Sam’s also has some things I can’t get elsewhere – they have spinach raviolis that my girls gobble up. But you are right about the prepacked food – most of those items we walk past.

Reply

thepennypincher October 25, 2008 at 9:10 am

There are times when you can save a lot of money: I bought a cheap food processor for $30 at Costco that was priced at $70-$80 elsewhere. We use this quite often when we chop up dozens of pounds worth of cabbage to make our homemade sauerkraut.

There are certain things that are good to buy in bulk: eggs (we buy the largest package of eggs, ten dozen eggs, and that will last us a couple of weeks). We also like buying our cooking oil in bulk as well as basics such as rice and flour. We usually buy the large bottles of shampoo there as well. They also have a good deal of frozen orange juice concentrate: $8 for 8 very large cans. We buy one of these every few months.

We like the convenience of sending our photos online to Costco to have them printed there. We usually buy our toilet paper there, but I would have to do the calculation to see if it is really cheaper.

Though it is very tempting, we rarely if ever buy any of the muffins or cakes. But, I do enjoy doing the rounds and trying out all their food samples LOL.

All told, my wife is quite good at keeping me in check when we go to Costco, and we only buy what we need and the bulk foods that we know won’t go to waste.

Reply

S.R. October 25, 2008 at 9:29 am

I find Costco to be excellent for finding deals on organic food, 3 pounds of organic beef for $13 that is better than conventional beef at the supermarket.
and Organic Bread is the same: cheaper that conventional. Since buying organic is important to me i will go there, but i agree completely it wastes food in the long run, so i plan on now once in a blue moon and going only for non perishable or freezer ready organic items

Reply

Kate October 25, 2008 at 9:37 am

Costco can be a good thing if you are a large family or have lots of storage space. For my family of three, in a small house, it is not economical nor practical. I was there last week with my mum who has a membership. As my husband works in the grocery industry, I was paying a lot of attention to prices. Food prices there are not actually cheaper … the larger packets would be about the same prices at a grocery store if they carried those large sizes. Notice that a small box of cereal at your grocery store is more per measurement than a larger box. Costco simply has the next sizes up that grocery stores don’t carry (again, good for large families or those with good storage space). If we shop the local grocery store sales for meat and other items, and don’t buy food only when we need it, then I can get most of my grocery items, per measurement, for the same price as at Costco. Without the massive headaches that kind of a store gives me.
I don’t have a Costco in my town, which also means factoring in gas and a meal away.
That all said, I can appreciate they sometimes have better deals on non-grocery items. The scrapbook paper packs are certainly a good deal and I always appreciate one as a gift 🙂

Reply

Gina October 25, 2008 at 9:46 am

I do shop at Costco, but very carefully and with a list. There are several things that we use on a regular basis that are significantly less expensive there, for instance coffee beans at $3.99 per pound. I don’t enjoy the atmosphere in the store (it is like a mall at Christmastime! Crowded and crazy!) so I have no incentive to wander around–I am in and out as quickly as possible.

Reply

joetaxpayer October 25, 2008 at 10:26 am

I understand that Costco can be a disaster given the right circumstances. I stopped taking my wife and daughter, and never have an issue there.
You do need to keep disciplined. I am aware of what item there provide value vs the wasters.
They have seafood weekend every two weeks. Huge shrimp $9.99/lb. These would cost as much as $19.99 in the local supermarket. I might buy these 3-4 times a year for holidays or special parties. This alone pays the membership fee.
I could go on, but the key is this; know the pricing for everything you’d consider buying there, and only buy what makes sense. Some huge quantities don’t make sense (a gallon of mustard anyone?) but some do (the 10lb pretzle bag that cost what 2lbs cost in the supermarket, or the 20 bars of soap that won’t go bad, ever) and you need to know the difference.
Joe

Reply

CanadianKate October 25, 2008 at 10:52 am

Costco is great under certain circumstances. We live a long drive away so only go once every 2 – 3 months. I keep a Costco list on the fridge and when the last of something is opened, I add it to the list, knowing I have ages before I’ll need to actually replace the item in my pantry.

I regularly buy my vitamins, crackers, memory sticks/blank dvds (for the business), calendars (for the business), vanilla (real is the same price as artificial at the grocery store), beef tenderloin, stamps, almonds, tampons, and needles for my dh’s meds. Also toilet paper because they are the last place I find single ply which we need for our septic system. On those items, I save my membership fees plus the extra cost of gas.

On weeks where I am at Costco, I also buy french bread, milk, eggs.

Costco is great if you need a high end something at a good price. If you can make do with a low end item (i.e. electric toothbrush) then it is cheaper to shop Walmart/Target.

For me it is also great for when I’m traveling and am asked to bring something like a veggie tray to a family event. They have major prepared platters for a fraction of the grocery store prices.

Costco is bad for impulse items. Joining the Compact changed my Costco experience dramatically, since I could only buy business items and food. It does mean I miss out on great prices on new release videos but since I’m not buying new, I’m not paying more for those items elsewhere.

Keeping a price book is a great help with Costco. Sure their prices are lower than the grocery stores’ regular prices but I only shop loss-leaders on prepared items (like chips, crackers, soda) and those tend to easily beat Costco prices.

For a busy person, Costco is great because such people don’t have time to drive to 3 or more grocery stores to get the loss leaders. But they do have to have the storage capability. My girlfriend ended up redoing her kitchen in order to fit in a bigger fridge in order to store all the frozen things from Costco. It will take her years to break even on that!

Reply

Meg October 25, 2008 at 7:40 pm

My husband and I used to buy a lot of food at Sams, though mostly stuff like fresh veggies, meat, flour, etc. We’ve started buying most of our groceries from a locally-owned grocery store, though, that is almost as cheap and where we can get reasonable sized portions. Our flour now comes out of a bin that so that we can pour just as much we need. And it’s nice to be able to buy more locally produced items, which the grocery store has a good supply of.

For those reasons, I wasn’t sure that I wanted to renew our Sams membership. However, earlier this year I decided to go there to buy some stuff since we had guests coming to visit and a party later that week. I didn’t know that our cards needed to be renewed until after I was in line to check out with a huge cart-full of stuff, so I renewed the card.

I still don’t know if we’ll renew again or not. We get our paper products there, as well as some really good pork cuts. However, we don’t use paper towels very much at all anymore and as much as I love our super-cheap-but-still-pleasant-to-use toilet paper, I’m not sure that we save $40 on it per year. Perhaps it’s time that I do the math, though!

Reply

Sandra October 26, 2008 at 4:37 am

Usually, your columns parallel my opwn experiences, but not this one.

We rely heavily on Costco. We buy meat (both fresh and frozen), fish (frozen only), flour, rice, beans, frozen vegetables, fresh and frozen fruit, and tortillas (I simply cannot make them as cheap as I can buy them there). We have a freezer and large pantry, so it is all stored. On the occasions we buy things outside of our every day use, such as disposable diapers (we usually use cloth) or processed foods like those you mention, they are being purchased for a specific purpose, usually a trip out of town. I’d rather spend money on umpteen packets of crackers or pretzels than go broke at restaurants.

Since food allergies are an issue in our family, perhaps it is easier for us to avoid the pitfalls of impulse food buys.

We are a one car family living in a fairly rural area, so quick trips to the store to fill in gaps are not an option. Our monthly trips to Costco have been a good tool for both controlling our spending and keeping my kitchen stocked until we need to make a trip – not until the next “scheduled” trip.

We do remain vigilant in making sure the prices are lower than other stores – but even when the prices are comparable, we save on gas because we are making one trip to one store.

Speaking of gas, we got some yesterday – at Costco – for $2.29 a gallon, the lowest price in our area.

I think my husband put it best. We were contemplating making some extra purchases for the upcoming holidays, and he concluded, “Let’s just buy what we need.”

Reply

Andy October 26, 2008 at 7:46 am

I shudder at the thought of people buying meat and eggs at a place like Costco and Aldi. To see animal products as cheap as they are in grocery stores should make anyone think how that business can be profitable if their product is just a few dollars a pound. The answer is factory farms where the animals are pumped with antibiotics to stay alive, never see the light of day, and absolutely terrible conditions that we should be aware of.

Please, please, please… Take a day to look around for good meat/dairy farms. Localharvest.com has a great search feature to find these places. Many small farms have some sort of “down on the farm day” where you can see how their animals are treated and know that there are good farmers out there not just concerned with profits.

And just because meat is labeled as organic, does NOT mean that the animal was treated well. Big brand organic meats are still raised in factory farms. ALL chickens are labeled “All Natural” so don’t be fooled by that either.

I would never tell someone that they should be vegetarian, since I don’t believe that is necessary, but I do urge everyone to at least know where their food comes from, and try to find a good source for meat and dairy products.

-Andy

Reply

thepennypincher October 26, 2008 at 8:59 am

This month, we tried something different. We went to our local butcher and bought 50 pounds of meat of $149 (CDN). The meat is wrapped and ready for the freezer. We have a variety of meats in our package from chicken, to beef, to pork and sausages. The meat was cut and wrapped the day that we bought it and is very fresh. Maybe it is not cheaper than Costco, but I don’t believe it is more expensive. The main benefit, as I see it, is that I am supporting a local business, and the profits stay in my community. It allows me to both keep an eye on my budget, and help out local businesses at the same time.

Reply

joetaxpayer October 26, 2008 at 3:08 pm

Kate’s suggest was best – keep a list of the things you buy or are thinking of buying there. Knowing the unit pricing is helpful for most things. For perishables, knowing if the item is so much stuff that it may spoil can’t hurt.
Joe

Reply

Linda October 26, 2008 at 4:16 pm

This was an interesting post as I have never been in a Sams or Costco. Costco is building a new store in my city & is scheduled to be opened soon. From reading the posts, I guess I probably won’t be shopping there. Doesn’t sound like it will be a fit for my family.

Reply

thepennypincher October 26, 2008 at 7:35 pm

I compared some prices. The cost of a 5×7 photo at Costco is $0.39 per print versus Wal-Mart at $0.97. This works out to a $0.58 cent per print savings. Over the course of a year, just the savings for 100 prints would pay for my Costco membership.

Reply

Mom24 October 28, 2008 at 4:15 pm

We definitely find Costco to help our food budget. There are numerous things that we will NOT buy there but many things that we do. Even my dad, who lives alone, will get the Perdue boneless chicken breasts for himself because they’re individually packaged and he can just grab one, thaw it fast and grill it on the indoor grill. We find that it’s great for contact solutions for DH, vitamins, milk, eggs, cheese, frozen meat and seafood, some convenience foods, yogurt and even those rotisserie chickens which are almost twice as big as the ones in the grocery store but for just $5.99. Oh – and their sheet cakes are WONDERFUL when you’re having a party for many because they’re yummy, pretty and cheap – just $17 I think now. Not bad for a cake that can serve 50-75 people.

The key is restraint. If you don’t have any, don’t go. But we shop with a list and will not buy anything extra unless it’s something that we really need. It definitely has saved us lots of money.

I just remembered one last thing that we saved money on – my first minivan! We went through the Costco auto program and got a car for $100 less a month (lease) than anyone else in the area. We even got yelled at by someone from a dealership who said that they’re lying and they can’t get us the car for that price. Well, they did so I figure on a 3 year lease, we can pay for the Costco membership until we die just on what we saved with that car. LOL

Reply

Rosa October 29, 2008 at 11:01 am

Our Costco membership paid for itself in disposable diapers & pullups over the last year. I used cloth when I was a SAHM but the daycare wanted disposable when I started working.

But I think we’re on our last giant pack of diapers (we’re down to only using them at night or for laundry emergencies), and I don’t think I’ll renew. Maybe after we get the Christmas wish-lists – I did save a ton of money last year on the mandatory gift-giving by buying toys, books, & movies there.

The thing it has been great for is canned goods & dried fruit – they carry the brand of spaghetti sauce I like, we bought a case of canned oranges & one of pineapple that has lasted us 6 months, and the giant-sized cans of sauerkraut & chickpeas ($2.50 for two quarts of hummus, basically) are staples in my pantry. That’s not enough savings to justify the membership without the diaper savings, though.

Reply

Leave a Comment

Previous post:

Next post: