Adding up the Costco savings

23 May 12 07:00AM EST
Post by George Perry
Cash
It all started with the fact that I wanted a cup of tea and we'd run out of decaffeinated tea - a small thing that grew into something much bigger: a trip to Costco.

As I grabbed my keys to go to the supermarket, my wife mentioned that we had to do a "big shop" so we should go together. A big shop is getting all the major items: laundry detergent, toilet paper, shampoo, - all those occasional items that you need and can be costly.

By sheer coincidence four of our friends had been to Costco and recommended it highly. Not knowing the supermarket-buying habits of my friends (and being an employee of CHOICE), I was skeptical. But faster than you could say 'buy in bulk', I found myself driving to Auburn - the home of Costco in Sydney.

Importantly, I’d mentally prepared myself for this being a trying experience on an overcast Sunday afternoon. And my first experience proved that was spot-on. Parking was a nightmare. While I queued to get into the car park, my wife got out to join up as a member. By sheer good luck, I managed to find a car spot after only about 10 minutes.

Having got to the entrance, I got a call from my wife telling me to pick up a trolley - take one when you can - that's the rule. The trolleys are the size of a small aircraft carrier, by the way.

Stick to a plan

So we met at the entrance, and agreed on a couple of principles:
  • We would only buy what we needed.
  • We would only buy those brands that we would ordinarily buy.
The first principle avoided us buying ever-so-cheap things such as Blu-Ray players, basketballs or outdoor children's playgrounds (I'm not kidding!). The second principle was an experiment as much as anything.

Using those agreed principles, we were off. While I wouldn't call the Costco shopping experience as seductive as, say, an Apple store, you could certainly buy more than you intended.

But we bought some of those staples I mentioned, some in massive quantities (60 toilet rolls anyone?) but stayed true to our principles: paper towels, toothpaste, shampoo, chicken, soft drink, razor cartridges, cereals, things for the kids' lunches and so on.

Price comparisons

The unit pricing (thank you, CHOICE) helped us understand how much cheaper these items were. It was madness in the shopping area itself so we didn't venture everywhere but we got what we came for ... and a little more. Of course, this is all fine if you have the storage at home.

We were amazed how inexpensive some of the items were compared to the supermarkets, especially if you’re prepared to buy large sizes. For example, the shampoo comes in 1.2 litre containers, laundry detergent in 10 kilogram packs and toothpaste in packs of four. But we could store them and they wouldn't go off, so what the heck.

While there’s no service or help to be seen on the shop floor itself, the checkout was pretty quick. In fact, we felt it was quicker than your average supermarket checkout. Made easier by the fact that Costco don't bag anything, just scan and chuck. Take your own bags, especially for the cold stuff.

Genuine savings

Being someone who loves numbers and spreadsheets, I thought I would do an exercise to see how much better off we were compared to doing the same shop at a major supermarket chain. Remember, we only bought the same brands as we normally buy.

Using the unit pricing, we calculated that if we bought the same items (in the same quantities) at our supermarket, we would have spent $225 more! Subtract the membership fee of $60 and we were still $165 better off. Yes, it was a hassle early and we went at the busiest possible time, and it's about a 30 minute drive from home but it still was well worth it. In fact, the saving we made on shampoo and laundry detergent paid for the membership.

To give you some examples of the savings:
  • Pantene shampoo at Costco was $1.16 per 100 mls at Costco v. $2.14 per 100 mls at our supermarket.
  • OMO detergent - $5 per kg at Costco v. $7.33 per kg at our supermarket.
  • Kleenex toilet paper - 53 cents per roll at Costco v. 72 cents per roll at our supermarket.
  • Finish dishwashing tablets - $6.80 per pack at Costco v. $16.20 per pack at our supermarket.
  • Napisan powder - $14.99 for 3kg at Costco v. $23.16 for the same amount at our supermarket.
We’ll definitely go back for all the items I mentioned above (and more probably). If you're picky about your brands, then Costco won't solve all your shopping problems but it would be a great supplement to your normal supermarket shop.

As for my decaffeinated tea bags, I’ll have to head back to my local supermarket for those.
 

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