Financial Analysis: Is Costco Worth the Membership?
Over the last three months, I’ve been keeping my grocery receipts to see if renewing the $50 Costco membership is going to be worth it. I’m sure that my household is very much like yours in that we have a number of staples that we go through steadily. The Excel sample below shows the cost comparison breakdown on some of those items.
As a basis for comparison, I used the lowest on-sale price that I received at my local grocery store. They do buy-one-get-one-free sales. Costco doesn’t.
Also, I did my best to equal out the price-to-quantity ratios.
So just looking at the prices, things come out pretty even. Before I began this, I had expected there to be a greater difference—with the benefit going to Costco.
But for me, there are other factors to consider:
- My condo is on the third floor of a building without an elevator. We also only have street parking. It’s nice to not have to limit my shopping trips to only the staples I can carry. If I have extras in the house, I can add a bit of variety to my cart.
- There are items that should be on this list, but they are missing because I haven’t had to buy them in the last three months. (toilet paper, dish washing detergent, frozen chicken breasts, etc.)
- The grocery store prices above are the best on-sale promotions of the last three months. But the sales are not always there. I will never go to the store and get buy-one-get-one-free on all of these categories at the same time.
Conclusion
If I use Costco for just these items alone on a twice-monthly basis (for rounding purposes), I will almost save back the $50 membership fee already. If I calculate in the other items I will purchase and the randomness of grocery store sales, I should come out ahead.
Convenience wise, Costco shopping is definitely a help.
So I guess when the renewal notice comes around, I’m signing back up.