Costco Deals, Costco Rip-Offs, and Middle Class Snobbery

Recently, Peter and I got a Costco membership despite my assertion that Costco is a rip-off. As it turns out, the truth is nuanced–you can save some money by joining their club, but you have to know the value of things, since not everything is cheaper, and some is even more expensive. And the deals you do get are rarely as large as the typical Costco shopper expects it to be.

For instance, to begin with, we joined because I needed new tires, and Peter was under the impression Costco had the best prices for tires. But when we priced them out, it turned out a full set of tires for my car at Wheelworks was $100 less than at Costco, because Wheelworks had a lesser-known brand of tires, whereas Costco’s best deal was set of Michelin tires with a $70 off coupon.

But we were able to take advantage of our membership for some modest savings. Among the best was a 50-lb bag of bread flour which cost the same as a 25-lb bag of bread flour at Smart & Final. (We make our own bread, and I know we’ll use this up.) I had $12 off coupon to a big tub of chlorine tables, which made them,well, $12 less than the same amount of chlorine tablets at Leslie’s or Home Depot. We decided to spend Peter’s birthday at the Santa Cruz Boardwalk, and since we’re an evenly-numbered family of 4, we could buy the Costco 2-ticket passes and saved $10 over getting 4 online passes. And to my surprise, when our local Enterprise car rental stopped taking 10% off Entertainment Book coupons, they would still take a 4% Costco discount, so we saved about $15 on a rental. The $1 hot dogs are a nice lunch, and if you don’t care about pizza quality too much, but you still want something better than Little Caesar’s, the Costco pizzas are a favorite choice.

It’s important to counter that not everything is a deal. I could buy lamb chops at $7.99/lb, when they’re $9.99/lb at Safeway, but would I have bought those lamb chops at all, if they hadn’t been at Costco?  I recently bought beef tenderloin on sale at Safeway $9.99/lb, and at Costco it was $14.99/lb.–the same as Safeway’s regular price. I needed two avocados for a recipe, and I was tempted to buy a 5-avocado bag which would cost $1.19 per avocado, when I knew Safeway was selling avocados (singly) at $1.25 each. Then Peter leaned over and whispered “moldy avocado” in my ear, and I figured the extra 12 cents to get what I wanted and not risk extra produce rotting on my counter would be better. Afterwards, I found individual avocados at Smart & Final for 75 cents each. I can get two gallons of milk at Costco for $3.18, which will cost me $3.70 at Smart & Final, but when I just need to get some milk, I’d like the fact that I can swing past Smart & Final at 8 am to get it, instead of having to wait until mid-day and then wait in a check out line for 1/2 hour to save 52 cents. I often hear people wax poetic about Costco gas prices, but a glance at Gasbuddy shows me the local Arco stations charge exactly the same, and their gas lines are shorter.

So what’s really the appeal of Costco? They do have some exclusive products which we like and can’t get elsewhere, like their 1/3-lb. sirloin burger, gourmet ravioli, and a box of feta cheese that’s just the right size for a few weeks of Mediterranean salads and dinners. But I’m not sure the products are so appealing they justify paying to join a club. The real appeal is snobbery. If you’re looking for bargains and aren’t committed to a specific brand, the places to go are Wal-Mart, IKEA, thrift stores, and froogle.google. On the other hand, no one brags about the pool table they got at Wal-Mart, even though they will brag about the one they bought at three times that price at Costco.

Costco’s done a good job of branding itself as a value, whereas its lower-priced competitors are perceived as bargains. You pay to buy into value; you don’t buy into a bargain. As for Peter and me, I suspect we’ll save $200-$300 over the course of a year by carefully buying the things we want and can realistically use which are actually cheaper at Costco, and we will enjoy the Costco exclusives which we like, even though they’re not a deal. The amount we save depends on how often we can stomach the long lines, and the glazed eyes of our fellow shoppers loading their carts with more goods than a normal family can consume. I suspect we’ll save more by getting groceries at Wal-mart than the net $150 or so we saved getting selected items at Costco. Plus, at Wal-mart, the lines are shorter, and you don’t have to wait for someone to review your receipt as you leave on the pretense that they’re cross-checking against their registers’ pricing, when we all know it’s to make sure you’re not stealing. We’re not snobs, so we’re only happy about real deals, and, mostly, at Costco, those deals are fairly modest–especially when you consider you had to pay to get them.

One additional note: Costco prescription drug prices are good, even better than online (though still more than the selected prescription drugs Wal-mart sells for $4), and I wouldn’t have known this until I had a membership and asked. However, in California, at least, you don’t need to have a Costco membership in order to use the pharmacy, so you can get those great prices without having to pay $50.

2 Comments

  1. Lane Kintigh

    Thanks for your thoughtful commentary.

    My wife and I are experiencing the exact kind of mild buyer’s remorse you describe here, and it is reassuring to know that others came to the same conclusions.

    Reply
  2. Ruiz

    Wow you put beautifully into words what I have been realizing over the past few years. People are really good at tricking themselves into thinking they are saving money, especially at “sales” when they spend more on stuff they simply don’t need at prices that are still too high! Love your post here, will follow if you still write.

    Reply

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