Home Budgeting Is Costco Membership Worth It?

Is Costco Membership Worth It?

written by Shelley Marsh 10/07/2013
Costco

For quite a while I have been wanting to check out a Costco store.  They promise big savings but I find it hard to stomach the concept of paying a $60 yearly membership fee for the privilege of shopping at their store, without knowing whether the savings stack up.  After much consideration, I decided to take a leap of faith and sign up for a year to find out what all the fuss was about.  So I powered off down Parramatta Road, handed over my cash and added an extra card to my wallet.  But the big question is was it all worth it?

In a word, I think, yes.  But let’s start at the beginning first.  For those who haven’t been Costco it is true American shopping experience.  Everything is super sized!  In terms of the store itself, think Bunnings with food!

But it is not just food you can buy there.  They have everything from TVs, to beer, cubby houses, lounge chairs, clothes and you can even buy an $8000 watch if you feel so inclined!

Do you have a spare $8,000?

In terms of groceries in most areas the big brands are covered but like most of these things may not have the exact product or brand you are after.

Not only is the store super sized but everything you buy is huge too!  Butter comes in 1.5kg blocks, toilet paper in slabs of 60 rolls, you can’t buy one loaf of bread you have to buy two and even Nutella comes in packs of 2×1 kilo tubs!  Luckily, the trolleys are tank sized to help you cart your haul.  Needless to say good storage space is a must if you are going to be a regular Costco shopper.

Yummmm – but maybe somewhat oversized even for me!

So what about the savings?  Are they worth it?  I think yes.  I took a random sample of 10 pretty common household items from my regular shopping list and did a quick price comparison with my local big name store.  This was the results:

Product Costco Price Quantity Local Store Price Quantity Costco Unit Price Local Store Unit Price % Saving
OMO Top Load (5kg) $54.99 10 kg $30.00 5 kg $5.50 per kg $6.00 per kg 8.33%
Finish All In One Dish Washer Tabs $37.69 112 tabs $21 48 tabs $0.34 per tab $0.44 per tab 22.73%
Cottonelle Toliet Paper $25.38 60 rolls $15.99 24 rolls $0.42 per roll $0.66 per roll 36.36%
Colgate Total 360 Toothpaste $15.99 3 x 220g $2.94 1 x 110g $2.42 per 100g $2.67 per 100g 9.36%
Radox Oxygen Shower Gel $11.99 2x 1 litre $8.89 1 litre $0.60 per 100ml $0.89 per 100ml 32.58%
Heinz Big Red Tomato Sauce $7.79 2 x 1itre $3.96 1 litre $3.89 per litre $3.96 per litre 1.77%
Old El Paso Soft Taco Kit $9.29 785g $5.00 405g $1.18 per 100g $1.23 per 100g 4.07%
Pine O Clean Multipurpose Spray $8.59 3 x 500ml $2.99 1 x 500ml $0.57 per 100 ml $0.60 per 100ml 5.00%
Mortein Fast Knockdown $15.29 3 x 300g $6.77 300g $1.70 per 100g $2.26 per 100g 24.78%
Huggies Nappies Walker Girl $65.99 132 nappies $33 64 nappies $0.50 per nappy $0.52 per nappy 3.85%
Average Saving 14.88%
NB. Prices as per Thursday the 20th of June
NB. I used price per unit to measure the cost savings, given the difference in quantities between my local store and Costco

 

On every product, Costco performed better than my local store.  On some products the savings were substantially better than others, but I think an overall average saving of 15% makes the membership fee and 30 minute drive worth it for me.  I think the savings would have been even bigger, if I had included fresh meat or vegetables but we have a small family and do not have enough room in our fridge to freeze the excess.  For example, lean mince is substantially cheaper than my local store at $6.99 per kilo but I would have to buy 3 kilos at a time, rather than the 500g that I buy now.  If you have a big family then I think the savings over time should be worth it and I will be planning a trip to Costco for Miss Money’s 3rd birthday party supplies.

A word of warning though!  Costco is the land of temptation and you can walk out of there with things that you do not need.  Yes, I am talking from experience.  I will admit that on a whim, I brought a packet of 100 Chupa Chups.  I only have one child! What was I thinking?

Chupa Chup…anyone?

So, yes Costco I will be back.  Once a quarter or so, for household items, like toilet paper, tissues, cleaning products that have long storage lives, oh and maybe a couple more Chupa Chups 🙂

If you would like to read more from me in 2015 don’t forget to sign up to my weekly email using the form below:



If you liked this post you might also like to read:

How Much Can You Save Shopping At Aldi?

Home & Contents Insurance: How Do You Know If You Have Enough?

Winter Family Meals On A Budget

How To Pay Off Your Mortgage Faster

5 Websites That Will Help You Make Or Save Money

How To Save On Your Electricity Bill

(Please note this is not a paid post.  It was done out of my own curiosity.)

 

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47 comments

Jane 10/07/2013 at 10:42 pm

We have a family of 5, with varying ages. We joined Costco not sure if it would be worth it. I find it pays to do your homework as there are some items that aren’t cheaper. We enjoy purchasing products that aren’t available at any other store. We get salmon patties and vegetable patties and fish etc. The savings are worth it and cover the cost. We go once every 6 weeks cause that’s when the toilet paper starts to run out. It is fun going on a Saturday when they have the food tastings. My kids love trying all the samples. I when your done shopping who can resist a $2:50 hotdog and large refillable drink. Everything at Costco comes with a lifetime warranty and as the computer tells them what you have bought and when it was bought it is really easy to return something if it breaks. Had no trouble returning a snorkeling set that the flipper slit.

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Money Mummy 11/07/2013 at 10:04 am

Hi Jane – thanks for the tip, I did not know about the lifetime warranty! That makes it sooo much easier to return things! I will have to admit I finished my trip there with the hot dog too! I was going to try the Sundae but it was nearly milkshake sized! Money Mummy.

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kidsrecipesandorganisedchaos 12/07/2013 at 8:12 am

We have a costco opening near us in a couple of months. a friend who travels to the city store has bought organic coconut oil for $13/900g which is exceptionally cheap. I’m looking forward to seeing their organic range which is supposed to be very well priced too.
Marianne 🙂

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Money Mummy 12/07/2013 at 7:52 pm

Hi Marianne – thanks for stopping by – I will definitely look out for their organic range next time I am there! Money Mummy

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Trish 12/07/2013 at 8:54 pm

That was a great comparison . I wondered if the savings were worth it. Can you shop with a friend and share membership ?

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Money Mummy 12/07/2013 at 9:22 pm

Hi Trish, membership comes with 2 cards for people at the same address, and each cardholder can take 2 adult guests and kids don’t count. So in theory you could buy a membership with a friend split the cost and shop together, one as the member the other as a guest. It would also be a great way to split the huge quantities that things come in and reduce the need for storage. Thanks Money Mummy.

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Janet @ Redland City Living 12/07/2013 at 10:25 pm

Great to find out more about Costco, though I don’t think there will be one in my neck of the woods any time soon. There are rumours of one being built at Northlakes, about an hour from here.

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Nat - Home Sweet Kitchen And Garden 11/08/2013 at 3:13 pm

Very interesting, I myself have been wondering if it was worth the effort and cost of joining a costco, and now I’m interested! Especially since there is one opening up only 15 minutes away! Thanks heaps for linking up via Home Sweet Kitchen and Garden!

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Shelley Marsh 12/08/2013 at 7:11 am

Hi Nat, it was my pleasure. I would definitely be keen if it was only 15 minutes away! Ours is about 30 minutes! I took my friend there the other day and she loved it! Money Mummy

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Mamagoingsolo 18/08/2013 at 1:02 pm

Interesting. I’m not sure if there is a CostCo near us (I’m in Perth) but it sounds like somewhere to check out. I would definitely buy lots of mince, etc, and freeze it – in fact, I’ve been thinking about getting a little chest freezer or something so I can buy more at once and save, and freeze it. Thanks for the review, catching up from Digital carnival 🙂

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Shelley Marsh 18/08/2013 at 1:57 pm

Thanks for popping over from the Digital carnival. Costco are yet to hit Perth but I am sure you will love it when they do 🙂 Money Mummy

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NorthMelbourneMum 27/08/2013 at 11:55 am

We were a bit like you – would the membership be worth it. I don’t know if their hours of opening are the same around the country but it is a shame they aren’t open later – would be a good way to avoid the crowds and better chance of getting a park!

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Shelley Marsh 27/08/2013 at 10:27 pm

Hi! Yes, I agree the car park is insane! I usually try and arrive very close to opening time, otherwise it is practically impossible to get a park! Money Mummy

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Daniela 12/09/2013 at 12:55 pm

Hi,
I definitely think Costco is worth it! First went in the US and was overjoyed when they opened in Sydney. We are a family of 5 (3 kids) and their nappies alone are worth the membership. The rest is icing on the cake and I love the experience – but not with the kids.
Dani.
PS. Visiting from the DP Carnival.

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Shelley Marsh 13/09/2013 at 2:14 pm

Hi Daniela! LOL! Yes I generally try and go child-free as well! Thanks for popping by! Money Mummy

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Adam Hodgson 16/09/2013 at 4:26 pm

Just a comment on the lifetime warranty. It is good as long as you have an active membership. I have returned a gift that someone did not want and there was no problem with the return.

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Shelley Marsh 17/09/2013 at 8:55 am

Hi Adam, thanks for the tip! Money Mummy

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Becky from BeckyandJames.com 28/11/2013 at 9:44 pm

We joined Costco last year and love it. Our staples are toilet paper, steak (don’t know if it’s cost effective but it’s good), cleaning products and so on. We actually joined for a jack my husband needed to fix my car and he’s been hooked since then.

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Shelley Marsh 29/11/2013 at 9:50 pm

Hi Becky, yes I agree shopping there can be quite addictive. I love bringing home the toilet paper slab – it means I do not need to worry about buying it for another 3 months!

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Lisa 29/11/2013 at 8:18 am

we don’t have costco here, we have Gimours which I think is similar.. I haven’t looked into signing up though – looking at this it may be worth it.

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Shelley Marsh 29/11/2013 at 7:43 pm

Hi Lisa, maybe you could find someone with a membership and check it out first? I am sure Costco will be over in New Zealand before long!

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MattBx 11/12/2013 at 4:13 pm

Forgot about brands; who does it compare to Aldi?

As an Aldi regular you’re pricing samples just don’t look that cheap to me.

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Shelley Marsh 12/12/2013 at 9:21 pm

Hi Matt, interesting you ask, I am going to look into that early next year. Keep an eye out for the post. Thanks Money Mummy.

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Ang 07/01/2014 at 1:54 am

I would be interested in the comparison of Aldi and Costco.

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Shelley Marsh 09/01/2014 at 2:13 pm

Absolutely. I am thinking of writing something on Aldi in the next few weeks. Stay tuned.

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Hope 17/02/2014 at 10:38 pm

As a household of 2 at the moment, I haven’t yet ventured into Costco – not sure it’s worth it. Yes perhaps it is in terms of overall savings but not in terms of managing the weekly cash-flow. Plus our apartment has zero storage for bulk items! Looking forward to the aldi comparison compared to the costco review. P.S. i might just have to make a visit to Costco.. mmm Chupa Chups!

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am 14/06/2014 at 10:51 pm

I might be the only one that says so against the costco. The reason being may be because of the small family of 3 and we are vegi. We don’t want to fill empty spaces for not so reason.

I think the comparison should starts from basic commodities like Milk bread butter, toothpaste, soap.

Nappies that we buy from Kmart is much cheaper than one from Costco (of course Huggies). I think it is not worth to pay for shop! wow! never saw such rule.

Even the bread

Yes Costco may help to save money only if:

Looking for big family big buying – bulk buying is always cheap – even from online grocery stores.
Against homemade brands items like Sugar from Coles, Nappies from Coles, or Kmart.

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Michelle 06/09/2014 at 10:42 pm

I’ve been doing some research on this for an upcoming article. There are some great things about Costco (like the quality of their meat!)
So far my research has lead to the conclusion that they are cheaper on “brand” products compared to supermarket everyday prices but more expensive than good specials. Their own brand products are generally similar or more expensive that Aldi equivalents.
I will still shop there for certain things but I think it is easy to overspend just due to the shear quantity of products!
Thank for your post 🙂

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Shelley Marsh 07/09/2014 at 9:03 pm

Hi Michelle, yes I think you are right. I think like with everything it is just a matter of knowing your prices as a good special at Coles or Woolies can save you more than Costco. Thanks for stopping by.

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Aaks 02/11/2014 at 11:23 pm

Good article. I am a member and have been to Costco Docklands, Melbourne. IMHO, Costco is not cost effective on many aspects.
1) Prices of vegetables are 25% to 125% more than the market prices (when compared with prices in QVmarket and vegetable shops in Coburg). For example I can buy 5kg potatoes for $3.50 in Coburg where as in Costco similar quantity and quality potatoes would cost around $8.00. From my memory I could not find not even a single vegetable sold at cheaper price at Costco.
2) Prices of some grocery items are also 25% to 100% more when compared with Aldi, or even Coles/Safeway. For example, at Costco 1.25 kg couscous is sold around $10, whereas in Coles it is $4.00 per kg or less (depending on the brand and special offers).
3) We need to pay for parking.
According my finding, Costco could not beat Aldi on any of those items I used to buy from Aldi stores, which is my regular shopping place.
The only plus I found at Costco arethe availability of some US brands, especially clothes, and tyres are sold at cheap prices.

3) We need to pay for parking

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Gloria 04/11/2014 at 2:42 pm

Well, speaking for myself in our household of two adults, I do save a LOT, at costco.

Comparisons on bread and milk are useless to me as I do not buy these so-called ‘staples’. We can’t and don’t eat them due to genetic illnesses.

I will use several kilos of fruit etc, when I am making preserves for our household consumption and for Xmas presents for work colleagues. However, I do compare prices, and only buy these if they are a good saving at the time.

The extra cupboard in the garage is used for the storage of loo paper, and other non perishable cleaning products.

I would easily use 5 kilos of chocolate, when making sculptured chocolate cakes for Xmas work dos, and family gatherings.

Costco enables me to do all this, without it costing a bomb, like before.

You have to be selective about what you buy, what items fit in your life, and what bulk purchases give you the biggest savings in regard to money, but also time/stress savings at the local supermarket… where the prices go up and the IQ’s go down.

I usually save more than the member fee in the first visit, and I usually go four times a year, with the odd special trip for sudden purposes/occasions.

Yes, the place is full of garbage, but you have to be canny and selective, just like anywhere else.
I also like that there are some overseas products that I can’t obtain anywhere else.

Thank You Costco!

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natham 27/12/2014 at 1:05 pm

I think people are being sucked into the buy bulk and Save…….buy minimal, put that extra money off your home loan…you will be better off in the long run……2kg of nuttela & 50 toilet rolls in the shed is just dead money sitting around not working for you.

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Sharon 21/03/2015 at 3:14 pm

Hi. Is it possible to get a day visitors pass to see what its like.? We could do this in the UK with our Cash & Carry.

Thanks

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Shelley Marsh 22/03/2015 at 7:51 pm

Hi Sharon, I don’t think you can. Angela’s comment above is a good suggestion go and look around then decide. Otherwise the other way is to find a friend who has membership and go with them. Each member can bring a guest.

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Angela 22/03/2015 at 9:48 am

You can go in a have a look around weekdays but you cannot purchase anything until you are a member. If after the visit you have decided to join up you just go to the desk where you will fill in the form and you will have your photo taken. You will need ID. You really need to know the prices as it is not always cheaper and you can end up spending more than what you had anticipated.

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Shelley Marsh 22/03/2015 at 7:52 pm

Great suggestion Angela and I totally agree that it really pays to know your prices! Bigger is not always better 🙂

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adriano 03/04/2015 at 2:04 am

Money Mummy, I disagree with you. Costco is a giant ripoff. The time and petrol you spend to go to their store for a saving of a few cents on some items will end up costing you more than less. Besides woolworths and coleshave lots of specials and clearances. But Laundry and toiletries I can get 100 toilet rolls for $30 Quilton 3 ply. and Omo 10 kg for almost One third the price of Costco. Honestly people are stupid for buying at costco

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adriano 03/04/2015 at 2:06 am

Costco is a giant ripoff. The time and petrol you spend to go to their store for a saving of a few cents on some items will end up costing you more than less. Besides woolworths and coleshave lots of specials and clearances. But Laundry and toiletries I can get 100 toilet rolls for $30 Quilton 3 ply. and Omo 10 kg for almost One third the price of Costco. Honestly people are stupid for buying at costco I disagree with you Money Mummy.

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Shelley Marsh 06/04/2015 at 8:02 pm

Hi Adriano – I agree with you that it pays to know your prices. Costco is certainly not cheaper in every instance but I find overall it delivers me enough savings to make my trips there worth while.

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edith 16/04/2015 at 11:55 am

HI!
Im from argentina (the land of crisis) so having the best price and quality is part of the female education! I tried cheap first but I was disappointed that nothing tasted like back home so I start looking for organic but prices were impossible even when I was running from store to store with a bag of coupons to catch the offer .. exhausted!!! and Looking for the best option to buy good, fresh, organic and cheap I have read everything about stores online and tried Aldi first and was not what I expected… some prices were the same at Winn Dixxie so I finally went to Costco, get my membership and spent $130 on basics (chicken, oil, healthy snacks, mozzarella, organic tomato sauce, brown sugar , etc). When I got home I get on the computer and compare with almost all Great Value Walmart items. It was surprising that I saved $54.39 in that comparison . So I almost get the money back from my membership card!
It is worth it!!!

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Shelley Marsh 21/04/2015 at 5:36 pm

So glad you had a good experience Edith! Thanks for taking the time to comment on my blog, it is greatly appreciated!

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