Some of my favorite bloggers have written about groceries in the past:
- Mr Money Mustache (link)
- Justin at Root of Good (link)
Mr Money Mustache concludes that Costco is great. Justin at Root of Good concludes Costco is for chumps and that WalMart prevails as low cost leader (with Aldi to supplement).
Justin is as smart of an individual as I’ve seen on the internet and one of my favorite bloggers. When he comes to a conclusion that contradicts my priors, I step back and wonder where I’ve gone wrong. Ever since reading that article of his a couple months ago I’ve been dying to know whether my intuition was correct (that Costco was a good deal) or whether Justin was correct.
What further sparked my curiosity is that I’ve heard many people rave about Aldi recently, the peculiar German grocer known for charging its customers for bags and requiring a 25 cent deposit in order to use a grocery cart. In particular, my brother told me a few days ago that he and is wife are dropping Costco in favor of Aldi because they didn’t find Costco to be a particularly good deal (and it’s located 8 miles from their house while Aldi is much closer). Further, the folks at ChooseFI have raved about Aldi. They’re smart dudes, so I used this activity as an excuse to take my first trip to Aldi.
My wife was kind enough to accompany me on this experiment. It was a fun date.
I forgot to take a picture at Aldi, but here is a picture of their shopping carts. You push your cart through the store with the chain dangling like that, as if you have just broken out of prison.
Distance from home:
Costco: 0.3 miles (though in four previous states we’d drive up to 15 miles)
Walmart: 1.6 miles
Aldi: 2.2 miles
Costco: Home, sweet home. Love the organized chaos, the samples, the cleanliness, and the friendly employees. Shoppers appear high income. Store definitely caters to the wealthy with high end furniture, electronics, clothing, etc. Gotta love the juxtaposition of the luxury ($150k diamond ring) alongside the $1.50 hot dog & soda.
Walmart: Put a bullet in my head this place is depressing. A low frequency humming in the HVAC system almost drove me insane. The act of pulling into the parking lot made my soul hurt. Shoppers appeared incredibly downtrodden and unhappy. The cashier was friendly, the saving grace of our trip.
Aldi: At first, I saw the carts outside and thought I could take one for free. There wasn’t a security guard watching them and they appeared to be free to take despite the rumors of the 25 cent deposit. Then I saw the comical red chain on the handle. The store is TINY, which is good and bad. Good in that you can get in and out easily. Bad because their isn’t much variety, and bottlenecks caused by other shoppers are really common due to the tiny aisles. The clientele appeared really happy. What in the world is with their random retail aisle? I have never seen a more random assortment of products in my life.
We chose generics when available (sometimes not available at Costco). We chose products we buy often (we’re mostly vegetarian so few meat prices). We chose non-organic when possible, though Costco is making this increasingly hard to do. We chose largest quantity at each store to minimize the price per unit. This was a non-issue at Aldi and Costco whose sizes are small and gigantic, respectively. With Walmart it mattered, and unsurprisingly the unit price was always considerably lower for the larger size. I marvel that people ever choose the smaller size with the significantly higher unit price. Brings back memories to when I was a young kid and would calculate the unit price of grocery items while my mother grocery shopped back before it was formally calculated for you.
Price per unit is shown in first three columns. Yellow highlighting indicates organic (non-organic option not available). Next three columns calculate the % over the lowest price. Green cells are those within 7.5% of the minimum. Red cells are those more than 20% of the minimum.
Excel file downloadable here (link):
To me, the math says that Costco reigns supreme victor for the type of shopping we do (healthy-ish + bulk). Costco primarily lost to the other two primarily when it only offered organic while its competitors didn’t. However, I was pretty impressed by Aldi. It was a formidable opponent to Costco in produce & canned products. But Costco dominates Aldi in the nut department, grains, and cheese. Produce & dairy (milk/butter) wise they were pretty comparable. I will probably buy salmon from them from now on, which is probably the only actionable change resulting from today.
Walmart is hell on earth. But we brave the inferno a few times per year to stock up on unsweetened applesauce, whole wheat pasta, and non-organic tomato stuff. We usually buy the entirety of their inventory in these items every time we go to minimize our time in that store. I chuckled at the signage in the grocery section indicating that they were perceived to be the low cost leader in groceries by residents of our state. Apparently residents of our state have a bad perception of reality.
Costco + a quarterly Walmart trip is what we’ve been doing since we first started dating, and today’s experiment reinforces that we’ll keep doing what we’ve been doing.
Costco requires membership, though if you spend at least $5,550/year (110/0.02), you make up the entirety of the fee. We in fact surpass this spending amount easily and get a refund check of about $200 each year.
It’s hard to compare the quality of Aldi’s vs Costco’s vs Walmart’s house brands. To be candid, I haven’t tried Aldi’s house brand, but I’m positive Costco’s brand is higher quality than Walmart’s.
Costco sells cage-free eggs which drives up the price. Knowing the disparity in prices between Costco’s eggs and Walmart’s, I have the moral dilemma if I should save a few pennies at the expense of chicken suffering. In many instances, Costco makes that moral decision on behalf of its consumers. I’m not sure where I stand on the issue. My father in law raises chickens. They appear to be of the dumbest creatures I’ve ever seen. But the thought of having to spend the majority of one’s life in a cage is depressing. I can’t say that I feel particularly bad about overpaying for eggs at Costco, especially when doing so saves me an extra trip to another store.
Costco requires purchasing in bulk. With our family size (5 kids), this is a non-issue, and in fact preferred. Even when my wife and I were dating we would shop at Costco and freeze stuff (bread, cheese, etc), so Costco can definitely work with smaller families if you’re smart. But if you don’t want to go through the nonsense, Aldi isn’t too bad.
At Aldi, we were cartless and bought salmon. The cashier put it in the cart adjacent to her (which we had NOT paid the deposit for) after checking us out. I assumed she intended for us to use the cart to take our order out of the store, and that I had just scored a free quarter in the process! I was elated! My elation only lasted 3 seconds until she chastised me for taking her cart. I guess she put our order in the cart for us to then pick up by hand. Lesson learned. The checkout process at Aldi was hilarious. A bunch of people either buying a hodge podge of bags or using old ones from Walmart or elsewhere. It seemed very inefficient from a time standpoint (but I get that reusing bags is good for the environment).
We started off in Walmart by price checking their produce, in which they were annihilated by Costco (who we had visited first). I almost quit the experiment at Walmart thinking it was futile, yet we persisted. I spent the rest of my Walmart trip wondering if the clientele were mindless drones who were bad at math.