March 2009

Today I'm continuing the series I launched four weeks ago entitled "Coupon Myths & Misconceptions."  My goal is to challenge some of the commonly-held excuses for not using coupons to save money on grocery and household items.  If you're interested to read the other posts in the series, I've created a category called "Myths & Misconceptions" for your reading pleasure.

My post this week is one I've been chewing on for some time now because it's a question I get A LOT: "Won't I save more by just shopping at Costco?"  My short answer to this question is "in most cases, no," but there's a caveat.  Costco sells MANY MANY items from coffins to cruise packages to Corian for your kitchen counters.  In the interest of time (and my sanity), I am going to stick strictly to groceries and basic household items – the sort of things you'd ordinarily buy at a supermarket.  Let's compare apples to apples, OK?

That being said, let's move right along.

You've probably heard this before, but I'll say it again.  You save money when you buy items your family needs and uses when they are at their "rock-bottom low" price.  How do you determine what that price is?  You need to pay attention to unit prices, and then you need to write them down.  There is this fallacy out there that buying in bulk is the way to go.   Nothing's more American than the shopping approach of "buy more, save more."  But in the world of unit prices, this does not always hold true.

To put it in dollars and cents, a couple friends of mine recently jotted down the Costco unit prices of items they regularly buy.  Here are some of their findings (note these may well be regional and fluctuate with time):

• Canned kidney beans = $0.72 each
• Canned corn or green beans = $0.79 each
• Canned black beans = $0.68 each
• Canned diced tomatoes = $0.99 each
• Canned Nalley Chili = $0.81 each
• Canned tomato soup = $0.66 each
• Diapers = $0.20 each (Huggies and Kirkland brand share this unit price)
• Paper towels = $1.17 each

When broken out in these terms, maybe it's easier to see that these prices are regularly matched and beaten at regular, everyday grocery stores.  There are a few other important disadvantages Costco has that you should know about (if you don't already):

• Costco does NOT accept manufacturers' coupons – only their own
• You must pay to shop at Costco (an annual membership for my husband & me runs $50)
• There is not a lot of flexibility when it comes to selecting quantity or size (e.g., you must buy all 12 cans of green beans as one unit or a huge tub of peanut butter – and good luck eating that before it expires)

Here's how I see it.  I can regularly beat Costco's unit prices at my grocery store AND I can use manufacturers' coupons AND I don't have to pay $50 to go there.  I can also buy the quantities and sizes that make best sense for my wallet and my stockpile.  Because of this, my husband and I have let our membership expire. 

When I was a Costco shopper, I also lamented how I never left the store without dropping at least $100 (and usually more).  This seems to be a common sentiment among Costco shoppers.  In all honesty, I can't remember the last time I spent $100 at a grocery store.  So how exactly are we saving all this money by shopping at Costco?  There's no denying – Costco DOES have some good deals.  My friend Jessie listed a dozen eggs for $1.40.  That's pretty hard to beat in my neck of the woods (get it…beat?  eggs?…moving on…).

The main problem, in my mind, is what I'll call the Costco Marketing Machine.  Consider:

• When you first walk in, you see LOTS of TV screens and electronics
• You also tend to see seasonal items that catch your interest – lights at Christmas, bulbs in the fall, etc.
• To get to the food, you MUST cross through other items first – books, movies, toys, linens
• Don't forget all the catchy end displays of food storage systems and home spa electronics
• There are always so many darn good samples cooking up that you just have to try
• The layout of the store makes it hard to get in and get out

When you end up spending a lot of money you hadn't intended or budgeted for, you are no longer saving money – no matter how good the deal.  Make sense? 

Again, I do not want you to run out and cancel your Costco memberships based on this one post (and neither does Costco, for that matter).  However, I do want to challenge your thinking that just because it's from Costco, it's a good deal and can't be topped.  And if using Costco for your gas, home electronic, travel, etc. purchases is saving your family some serious cash, more power to you.  Just be open to the fact that there may be other deals to be had by looking elsewhere (and some places might even be happy to price-match or beat Costco's prices for you).

In closing, I'd like to leave you with five simple strategies for surviving Costco if you choose to shop there:

1. DON'T take a cart.  Their big carts just encourage you to fill, fill, fill the empty space.  If you truly came in for the box of green beans, get a little workout in by lugging them to the checkout.  (You can do a few lunges with them as you wait in line, too.) 
2. DON'T go on an empty stomach.  Good night this should go without saying. 
3. DO give yourself a time constraint.  Make sure you don't dilly-dally. Schedule your Costco trip about 20 minutes before you need to show up to your friend's house for dinner (or better yet, your boss' house).
4. DO leave the credit card at home.  Plan your trip enough to just use cash.
5. DO wear horse blinders.  You might look like a nut, but at least your eyes won't wander and get your pocketbook in trouble.

Be sure to watch next Monday for yet another coupon myth and misconception!

Photo credit Stephen Stacey

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