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Costco and Walmart are both major nationwide retailers that offer a wide variety of products at bargain prices. Customers of either retailer can expect big savings, but the retailers themselves have radically different business models. Walmart uses a traditional big-box retail model while Costco uses a membership-based model. Costco also drives down prices by offering wholesale products in bulk quantities.
If you’re hoping to save money, and you’re wondering about the pros and cons of Costco vs Walmart, look no further.
We know that in the battle of Costco vs Walmart, prices are king. That’s why we’ve compiled this guide to compare prices and product options and help you make the best decision for yourself and your wallet.
Costco vs Walmart: Prices
Both Costco and Walmart are known for their outrageously low prices. Customers love being able to stock up on all of their essentials on a budget.
However, Costco might have an initial competitive edge vs Walmart.
Costco’s unique business model allows it to pass savings on directly to the consumers. Although membership fees only account for 2 percent of Costco’s total revenues, these fees cover most of its operating margin, allowing Costco to sell items in bulk at extremely low wholesale prices. Additionally, Costco has eliminated the overhead costs of business expenses like salespeople and ornamental buildings, passing on further savings to their loyal customers.
On the other hand, Walmart offers some of the lowest prices available to its customers by price matching competitors and by offering frequent sales, known as “roll-back” pricing. As a result, in the battle between Costco vs Walmart’s prices, the difference often comes down to the costs of individual items.
Costco vs Walmart: Household Goods
When putting Costco and Walmart against each other, whose prices come out ahead?
It can be difficult to compare Costco’s prices to other major retailers like Walmart because most of Costco’s products are sold in bulk, while products at Walmart are usually sold by unit. That said, when comparing the unit price for each of these 11 common household products:
- Milk
- Eggs
- Cheese
- Paper Plates
- Toilet Paper
- Facial Tissue
- Sanitary Pads
- Laundry Detergent
- Pop-Tarts
- Mayonnaise
- Mouthwash
Overall, Costco was the winner. Costco offers lower prices than Walmart for six out of the 11 products above. Still, Walmart’s prices are very close to Costco’s, and Costco members need to pay an additional yearly membership fee. The basic Costco membership is $60 a year while the executive-level membership is $120 a year and includes more benefits and discounts.
Because Costco sells the idea of savings to their customers (and usually delivers), they can sometimes get away with higher prices than competitors like Walmart. A list of products that are not recommended to buy at Costco include:
- Meat and Poultry
- Diapers
- Stationery and Office Supplies
- Fruits and Vegetables
- Pre-made Meals
- Baking Mixes
- Dairy
For some of these products, such as meat and poultry, pre-made meals, baking mixes, and dairy, Costco is more expensive than other local grocery options. And for certain products, it simply does not make sense to buy in bulk.
Buying fresh fruits and vegetables in bulk at Costco might seem less expensive on paper, but you may end up throwing away the extra produce you can’t eat before it overripens. Similarly, $29.99 for 174 diapers at Costco sounds like a great deal, but babies grow very fast, so you might be stuck with leftover diapers you can no longer use.
By offering you enormous savings in some areas but not others, Costco can sneak in significant price differences compared to stores like Walmart. In 2018, Costco sold ten reams of copy paper for $32, but during back-to-school sales, Walmart sells one ream of copy paper for $2—a $12 total price difference if you buy ten reams at Walmart.
By taking advantage of sales at Walmart, you can often find prices as low or even lower than Costco.
Costco vs Walmart: Groceries
Although neither Costco nor Walmart are traditional supermarkets, both retailers have expanded into the grocery sector with large grocery sections including meat, produce, and bakeries. When deciding which store to buy your groceries at, you should consider not only their prices but also their selection and product availability.
Inside Walmart, shoppers will find a giant grocery section with produce often available for less than $1. Shoppers can also purchase single baked goods or baked goods packaged in bulk. Hungry customers will love Walmart’s hot food section where they can choose from take-out options including meat, seafood, and side dishes.
Unlike Costco, Walmart doesn’t sell most of its grocery items in bulk. However, whereas many of Costco’s grocery options are their in-house Kirkland brand, Walmart sells a huge variety of different brands for all of their various grocery products.
Compared to Walmart, Costco isn’t ideal for a quick shopping spree to grab milk and eggs after work. The bulk items are designed for shoppers to stock up, so customers usually make a big trip to Costco every few weeks.
Hungry shoppers love Costco’s infamous food court and its low prices, but Costco’s grocery section has far fewer prepared items ready to eat compared to Walmart’s diverse prepared food options.
One aspect Costco does better than Walmart? Kosher options! Certain Costco locations have a wide variety of kosher meat, dairy, and baked goods. However, if you’re in a rush, Walmart’s self-checkout lines are a huge timesaver.
While both stores promise big savings and their grocery prices are pretty similar, Costco might be a better choice if:
- You’re stocking up
- You’re shopping for a family or large group
Whereas Walmart might be the best place to shop for your groceries if:
- You’re looking for prepared or hot foods
- You’re a fan of specific brands
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At the end of the day, savvy shoppers won’t go wrong with a trip to Costco or Walmart.
Both retailers offer bargain prices and a wide selection of household items. Costco boasts a 90 percent renewal rate on its memberships, and Walmart continues opening new stores throughout the United States.
At a certain point, it all comes down to what you’re shopping for.
Want even lower prices for your Walmart purchase? With RebateKey, you’ll never pay full price again. Receive up to 100 percent cash back rebates and coupons from trusted major retailers like Walmart when you shop online.
Sources:
https://www.businessinsider.com/walmart-versus-costco-which-is-better-for-groceries-2019-8
https://money.com/costco-or-walmart-who-is-cheaper/
https://www.costco.com/join-costco.html
https://money.com/7-things-you-should-never-buy-at-costco-according-to-a-shopping-expert/
