Is Costco really that much cheaper than its competitors? We crunch the numbers.
It’s fair to say that whether you’re feeding a family, a duo or just yourself, the weekly grocery haul always takes a big chunk out of your weekly budget. If that expense is worrying you, take comfort that you’re not alone.
Research compiled by CHOICE has revealed that the bulk of Australian consumers are seriously concerned about increased cost of living pressures, with food expenses topping the list along with electricity, fuel and health. In a national survey of 1000 Australians across the demographic spectrum, 48 per cent said their bills had increased a lot over the past 12 months, while 41 per cent said their bills were a little higher. Only 8 per cent didn’t notice an increase.
In that climate, it makes sense that people would turn to a wholesale giant like Costco to relieve the pressure. But is Costco actually cheaper? We’ve scoured through Brisbane’s biggest grocery sellers — Woolworths, Aldi, Coles and Costco — to see how their items all stack up against each other, and to find out whether Costco separates itself from the pack enough to justify buying a $60 membership to shop there.
We began by compiling a list of items based on the categories featured in the Australian Consumer Price Index basket. For practical reasons, the basket cannot include every item bought by households, but it does include all the important kinds of items.
From there, we tried to find what could be regarded as ‘like for like’ products for each of the supermarkets. This resulted in many items being removed from our list because they were either not directly comparable or one of the supermarkets didn’t carry the item. Prices are as advertised at the time we compiled the list, but are naturally subject to change, perhaps even by the time you read this.
|Product||Unit measure||COLES||WOOLWORTHS||COSTCO||ALDI||Who is the cheapest?|
|Leg of lamb||100g||$1.20||$1.20||$1.30||$0.90||ALDI|
Not only is Costco not significantly cheaper than its competitors, but it actually came in as the most expensive option amongst the four retailing giants for the products we compared them on. Aldi was the cheapest. While these prices will fluctuate, you’d expect Costco to be significantly ahead of the pack at all times to justify the $60 membership fee, not lagging slightly behind.
Of course, our price comparison isn’t perfect. For instance, while we’ve standardised the units of measurement, nobody really buys 100g worth of mince. Items that you’re likely to buy in larger quantities will obviously skew the results towards the stores that came in cheapest for those items if you really filled a trolley.
Crucially, we ignored brand and simply focused on price, which does mean that whilst one store may be cheaper for a specific product, it will not necessarily be comparable in quality. If brands are particularly important to you, a membership at Costco — which prides itself on offering quality brands at lower prices — might very well still be a worthwhile investment.
While the bigger chains often have a bigger variety of items for standard prices, it can sometimes be a good idea for both your wallet and your dinner table to try out a few locally owned stores as well.
According to Nick Behrens from the Chamber of Commerce & Industry Queensland (CCIQ), Brisbane has a great network of locally owned businesses in place that offer a range of produce.
“We have some great local business here,” Mr Behrens said. “We have a wonderful range of suppliers who offer the best in beef, seafood, fruit and vegetables. You will also find a wide range of locally owned services such as newsagents, florists and butchers.
“If every employed Queensland person spent an additional $10 a week at local businesses we would have an additional $23 million in our economy each week, an additional $1.2 billion each year and it would create an additional 20 thousand jobs.We don’t want to turn this into small business against big business, but if you bought a few of your groceries from locally owned businesses instead of Coles or Woolworths it would make a big difference.”
Have you bought a Costco membership? Was it worth it, or do you feel like you wasted your money? Do brands matter to you, or do you just want the cheapest option? Let us know in the comments below!