We try to save as much as we can on groceries, which is becoming more and more important as the price of food increases.
One of the ways we save money is through purchasing items in bulk at big-box stores like Costco. We love Costco – great service, quality products and friendly staff.
We do need to be careful though, as I have found it is quite easy to overspend on things we are tempted to buy only because they are a good deal.
Here are 11 things about Costco you probably didn’t know…..
- All their products are marked up by no more than 15%. Costco basically breaks even on most of their products and makes most of their profits from membership fees. The majority of members do not use their membership enough to recoup the annual fee, so Costco makes more profits from the annual membership fees than on any one product.
- All aisles are unmarked on purpose – so shoppers will wander the store, see more items – and spend more. The average shopper spends 20% more time looking for items in a Costco store compared to a regular retailer that uses marked aisles.
- The average Costco stocks only 4,000 items (this is quite small compared to an average Wal-Mart which stocks about 100,000 items).
- They haven’t raised the price of their top-selling meal combo (hotdog and a pop for $1.50) since 1985. When asked about the price of the combo, their President stated that they are looking at ways to make the price even lower.
- Their top selling item is Kirkland branded toilet paper. In 2011 they sold one billion rolls – enough to wrap around the earth 1,200 times
- In 2012 the busiest Costco location in North America was located in Calgary, Alberta (South location).
- They gross about $93 billion per year on sales without spending any money on advertising. This makes sense, as I don’t recall ever seeing an ad for Costco
- Costco has one of the lowest employee turnover rates and highest employee satisfaction rates of all retail stores.
- From 1985 to 2013, Costco shares rose over 1600%.
- Their rock-bottom prices have caused many customers to have the “Costco effect” – when a customer goes into the store wanting to buy one item (such as milk) and they end up buying several items (such as a bicycle or air conditioner). This has led to criticism from personal finance experts who argue that many people wipe out any savings they realize at Costco simply by overspending.
- Costco is so popular that one individual has created a site dedicated solely to detailing her experiences at the store and what it has to offer. The site is called AddictedToCostco.com
How to Save on Your Costco Membership
You can save on your annual membership by timing your renewal carefully.
We make a trip at the end of our membership expiry month and buy enough to last us all the way through the following month (or 2 months, depending on the time of year).
Then we renew our membership on our next trip, which is usually more than 30 days from our last trip since our membership expired.
For example: if your membership expires in January you can do one trip at the end of the month to stock up and then return at the beginning of March to renew. Over time, you will only pay the renewal fee every 14 – 16 months – which reduces the cost per year by about 15 – 25%.
Has anyone shopped at Costco recently? How has your experience been?