Home > Investing > My CostCo Investment: 6 months later

My CostCo Investment: 6 months later

We hear so many iterations of “Savings, Savings, Savings!” from various retailers trying to convince consumers to spend more and more.  But aren’t there some deals that actually make sense?

For a long time I’ve wondered about a membershipa at CostCo, so I decided to prove it.  As you probably know, I love spreadsheets so I documented my purchases vs the equivalent price at a few local grocery stores.  Here’s how it all worked out!

My Method

I live right next to a pretty cheap grocery store so I went through with my smartphone one day I wrote down the price/lb for each item I could buy at CostCo.

As you can see there are only a limited number of items I purchase at CostCo.  Like I’ve mentioned before, many items at CostCo are more expensive than shopping at your local grocery store, so you need to know what to buy.

  • Dish Soap
  • Cereals and other dry goods
  • Coffee
  • peanut butter
  • chocolate chips

These items don’t really go bad, so buying them in bulk make sense.  The deals vary from 10% to 50% cheaper.  There is a $55 membership fee that I had to pay when I signed up, and I really wasn’t sure that the savings would make up the difference

How much do you save?

Each time i hit up CostCo, I took the receipt and recorded my purchases in a Google Doc.  After 6 months of buying my staples at CostCo, I summed it all up and graphed the results for everyone to see.

The blue bar is how much I spent on each item throughout the 6 months period, and the red bar is how much I saved compared to if I had purchased an equivalent amount at another grocery store.

A 6 month review of my CostCo membership

A 6 month review of my CostCo membership

I eat a lot of Almonds as snacks between breakfast and lunch at work.  It’s one of my favorite foods.  I also buy a lot of coffee because I have a daily habit and try to make more of it at home than in coffee shops.  Apparently I also eat quite a bit of Peanut Butter and Granola.  Good to know…

Financial Metrics

So here are the financial metrics of the first 6 months of my membership.

  • Membership Cost: $27.50 ($55/2)
  • Spent: $193
  • Savings vs grocery store: $110
  • Return on Investment: 400%

It seems like my CostCo experiment was a great success!  One thing I’d like to point is that I might have not actually gone through as much of each item had I purchased it at the grocery store.  But that’s just an assumption I’ll have to live with.

It’s good to know that my time spent at CostCo is extremely profitable.  And that’s not even counting the gas deals I’ve gotten.  CostCo typically has the cheapest gas in my area.

So if you are looking to buy a whole bunch of cereal, almonds, peanut butter, or coffee, a CostCo membership might save you $200/yr!  It’s worked for me!

  1. Sweta
    January 16, 2013 at 10:25 AM

    Great post, thanks for sharing! I go to Costco about once a month so this post definitely came in handy.

  2. January 16, 2013 at 8:00 PM

    Thanks for the comment! As you can tell, I consume a LOT of almonds. The last time I went, I noticed that increased the almonds from $3.63/lb to $4.30/lb… that would just about wipe out the gains over buying them at my local grocery store. But I still think buying most of my dry goods there should work out pretty well.

  3. January 18, 2013 at 8:15 PM

    Glad Costco is working out for you. I have a bit of a personal vendetta against Costco, so can’t imagine ever getting a membership again, but I’m glad it’s working out for you.

    Just out of curiosity, did you use regular prices at the grocery store for your comparisons? We usually stock up with sales and coupons for our staples, so tend to get a lot of them at the grocery for well under MSRP to start with.

    Have you ever tried making your own granola? I started doing that this year and it’s sooo good and so much better for you! =)

    • January 18, 2013 at 9:09 PM

      I’d be interested to hear about your vendetta against CostCo. Have you written a blog post about it?
      I’ve thought about the coupon issue, but I guess I called it a draw because I get CostCo coupons too.
      I actually did try making my own granola about three times. Each time it came out black and gooey…. I think I did something wrong. Do you have a favorite recipe?

      • January 19, 2013 at 5:33 AM

        I haven’t ever written about Costco – maybe I should…

        This is Mr. PoP’s favorite – he likes it better than the Casc Farm Chocolate granola:
        3 c old fashioned oats
        3 c rice krispies

        1 c unsweetened applesauce
        4 tsp dark choc. cocoa
        1/3 c stevia in the raw (measures like sugar)
        2-3 T honey

        Mix first two ingredients. In separate bowl, mix the rest. Then mix together. Lay out on two foil-lined cookie sheets that have been sprayed with Pam.

        Cook at 325F for ~40-60 minutes, pulling them out to break the granola apart every 20 minutes or so. A lot of the times, if it’s just still a *little* moist, I turn the oven off and let the pans sit in there while it cools in the dry oven air. It’s humid enough in FL, that it makes a difference.

        Store it in an airtight container. Keeps for a week or two.

        This recipe isn’t as sweet as the store-bought version (that’s part of why we like it), so if you need to ease in to less sweet, try adding a little more stevia and honey the first few times, or make it as is, and top with a tsp of honey or so when you eat it.

        Admittedly, the baking part might take a couple tries to figure out what works best in your oven, but I think it’s worth it. ‘Cause once you figure that out, you can experiment more with the recipe. I’ve done mushed up bananas instead of applesauce, and PB2 (powdered peanut butter) instead of the cocoa for an awesome PB/banana granola, too!

        I just try and keep the ratios about the same, 6 cups oats/krispies : ~1.25 c moisture/flavor ingredients

  4. January 18, 2013 at 8:26 PM

    We spend a LOT of money at Costco on food (and I hope are saving some over the grocery store prices) but we’ve found that our Costco membership usually pays for itself with savings on one big-ticket item per year (like our recent skiing lift tickets or a pair of eyeglasses).

    • January 18, 2013 at 9:17 PM

      Oh yea, there are certainly some awesome big ticket item deals, if you want them. They also have a $100 gift card for $75 to a restaurant I like so buying two of those would do it too. I’m always surprised at the crazy stuff you can find in that store! One time, a guy was trying to sell me underfloor heating for my bathroom… I was like “Sorry man, I just came for some almonds.”

  5. January 21, 2013 at 2:43 PM

    This is definitely location dependent, I walked through a costco several months ago and did a similar comparison and found it was a wash. Granted we also have a huge warehouse style independent grocery store closer to home.

    You mentioned laundry soap in your comparison list… have you tried making it yourself? We’ve been doing it for a while and found it works the same as or better than the commercial stuff and costs about 1/10 as much. I have our recipe posted on my blog, otherwise there are a ton of other variations online.

  6. January 21, 2013 at 6:48 PM

    Hi David, I meant to say dishwasher soap, but I’m always interested in a new idea. I’ve heard of DIY laundry soap before, but I’ve also heard that it’s not worth it. That being said, I’m going to go check it out on your site right now. If it’s really 90% cheaper, I don’t know why I wouldn’t do it myself… plus chemistry is always a good time! Thanks for the suggestion.

  1. January 20, 2013 at 5:02 AM

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