Whether it’s butter, yogurt, coffee or laundry soap, you can save several dollars on basic products by going to Costco rather than going to a low-cost grocery store.
The Journal carried out a small survey comparing products of the same brand found in a Costco warehouse and in a grocery store. Of course, we had to do calculations in order to align prices according to quantities.
However, even though a membership card is required, the customer gets their money’s worth by going to Costco. The 10 products compared are less expensive than the Maxi or the Super C.
The largest gaps are in laundry soap and coffee. Both companies deliver a product with a single quantity for Costco.
While there is a Purex container for 110 loads at the supermarket, the customer can do 250 with the one at Costco. In terms of price, it’s $1.51 difference per liter of soap (see table). By purchasing at Costco, consumers can save nearly 65% compared to what they find in the grocery store.
An identical observation can be made with Van Houtte coffee. By purchasing a 1.1kg container, the customer pays $19.99. He can pay more than 52% more for 100g of the same product.
A unique model
The Costco banner has a unique model, according to Sylvain Charlebois.
“They negotiate with very few suppliers and they offer them enviable visibility on the shelves,” explains the scientific director of the Laboratory of Analytical Sciences in Agri-Food.
“They make their money selling membership cards.”
Last September, we learned that subscriptions brought in more than $6 billion Canadian in revenue per year for the retailer.
“They’re not too concerned about margins like grocery stores. It’s a very different business model, adds Mr. Charlebois. They are capable of controlling their market well.”
This is why we still find hot dogs for $1.50 at the small snack bar and a cooked chicken for $7.99 inside their walls.
It’s a nudge
During our investigation, we also noticed that certain grocery stores are capable of competing with Costco on certain products.
This can be seen with eggs and chicken, where the price gap is less significant. For eggs, we find the same quantity for a slightly higher price ($0.30 more). It’s a solution when you don’t want to take a detour.
The competition is also interesting for chicken. Super C is able to have a good price with $15.41 per kilogram for boneless breasts. Same thing for the Maxi, which offers a club format at a price around $26 for a package, when it is available.
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