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No matter how well you stick to your list, make lower cost substitutes and scour the apps for deals and discounts, it feels like your grocery bill is just getting higher and higher. Typically, no single store has the lowest price in every category. One chain might have the best prices for meat while another offers the best deal on your favorite cheese or cereal.
Usually, the time and gas used to drive around from one store to another chasing the lowest prices is one of those frugal habits that aren’t worth it. Instead, picking a single store that tends to be cheaper for most things, even if you end up paying a few pennies more on a couple of items, will net you the best savings.
So, if you’re picking just one store, which store should it be? That was the question driving a recent Consumer Reports analysis. The nonprofit consumer information organization compared prices at dozens of nationwide chains in six major metropolitan areas to find out which grocery store offered the lowest prices on the same basket of goods.
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Since Walmart is typically the cheapest, the major retailer was used as the benchmark against which all other retailers were compared in the Consumer Report analysis. While it was definitely still one of the lower cost options, it was beaten by five other retailers.
The cheapest grocery store of all, according to the report: Costco. Prices at the warehouse club were 21.4% cheaper on average compared to Walmart.
With a price difference that dramatic, the savings can more than make up for the annual fee to become a member, especially if you take advantage of special sign up offers like the Costco membership deal at Stack Social right now that gets you a Costco shop card worth up to $40 when you join.
Here’s how every store that beat Walmart compared to the major retailer on price, according to the Consumer Reports analysis:
- Costco: 21.4% cheaper
- BJ’s Wholesale: 21% cheaper
- Lidl: 8.5% cheaper
- Aldi: 8.3% cheaper
- WinCo: 3.3% cheaper
When it comes to price, it’s clear that warehouse clubs, especially Costco and BJ’s, offer the biggest savings. That’s good news for shoppers because these stores require memberships with annual fees to get access to the lower prices.
Knowing that you really are getting meaningful savings on your groceries helps take the sting out of that annual fee.
Another way to make that annual fee worth it is to stack cash back rewards on top of those savings. By maximizing credit card rewards, you can save even more on groceries each month.
Is Costco really cheaper than Walmart?
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To see the difference for myself, I compared a few common grocery staples at Costco and Walmart, using the prices listed online. Here’s what I found:
Jif creamy peanut butter was notably cheaper at Costco. A 16-ounce jar cost $2.96 at Walmart, which works out to 18.5 cents per ounce. Meanwhile, you can get two 48-ounce jars for $13.99 at Costco (or just 14.6 cents per ounce).
Coffee was also significantly cheaper at Costco. For the comparison, I looked at Starbucks Pike Place Roast K-Cup coffee pods — though you can pay even less per ounce at either retailer if you opt for a bag of coffee rather than individually-packaged pods.
Still, if you love your Keurig, an 88-pack of the Starbucks pods will cost you $76.68 at Walmart. That’s a little over 87 cents per pod. At Costco, however, you can pick up a 72-pack for just $47.99, which works out to 66.7 cents per pod. That’s over 20 cents per pod saved.
Curiously, name-brand olive oil was actually a few cents cheaper at Walmart. A single 25.5 oz bottle of Terra Delyssa First Cold Press Extra Virgin Olive Oil was $9.98 at Walmart (or 39.1 cents per ounce). A three-pack of the exact same brand and same bottle size costs $34.99 at Costco (or 45.7 cents per ounce).
For these comparisons, I stuck to brands that were available at both Walmart and Costco. If you include store-brand versions, the products might not be an exact match. But, if you’re simply looking for the cheapest possible options at each store, here’s how prices compare between Walmart’s “Great Value” and Costco’s “Kirkland” versions of the same sample groceries compared above:
A 40-ounce jar of Great Value Creamy Peanut Butter is $3.88 at Walmart, which works out to 9.7 cents per ounce. Meanwhile, a two-pack of 28-ounce jars of Kirkland Signature Organic Creamy Peanut Butter is $11.69 at Costco. That’s 20.88 cents per ounce, which is double the unit price at Walmart. However, Kirkland’s version is organic, so this isn’t a perfect match.
It’s a similar story for olive oil. You can get a 17-ounce bottle of Great Value Extra Virgin Olive Oil for $5.97 at Walmart, which works out to 35.1 cents per ounce. At Costco, you’ll spend $27.99 for a two-liter bottle of Kirkland Signature Extra Virgin Olive Oil. That’s 41.4 cents per ounce.
Once again, the Kirkland version here is cold-extracted and the olives are traceable to Italy. The Great Value version is a blend of olives from different countries and does not say it was cold-extracted.
On the other hand, coffee is still cheaper per unit at Costco, even when grabbing the store brand. A 12-pack of Great Value Classic Roast Ground Coffee Pods is priced at $4.82 at Walmart (or 40.2 cents per coffee pod). But you can pick up a 120-pack of Kirkland Signature Coffee Organic Pacific Bold K-Cup Pods for $44.99 at Costco (or 37.5 cents per coffee pod).
Again, the Kirkland version is organic. So, in this case, you’re getting an organic, fair trade certified coffee for less per pod than you would spend at Walmart.
Overall, for groceries where the brand matters to you, you’re usually going to spend less if you shop at Costco. For generic groceries, Walmart’s Great Value brand tends to be cheaper (though not always) but also is notably lower quality compared to Kirkland.
If you stack membership rewards on top of cheaper store brand prices, the math might work out in Walmart’s favor. But that really depends on what your typical grocery list looks like and what your priorities are. Factor in the annual fee and other perks before deciding whether Walmart+ is worth it over a Costco membership for your family.
