Aldi vs Costco vs Walmart

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

 

First impressions:

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.

 

Methodology:

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.

 

Calculations:

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.

 

Results:

Excel file downloadable here (link):

 

Conclusion:

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.

 

Caveats:

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.

 

Funny story:

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).

Not-so-funny story:

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.

25 thoughts on “Aldi vs Costco vs Walmart

  1. Another great, useful article! I really enjoy your writing and analysis. Last 2 years I had both Costco and Sam’s Club memberships for my family of 4 and just let the Costco lapse as Sam’s is a much better deal for us (as well as a much better experience than Walmart). Our family devours about 20-30 lbs of mixed berries a month. They are far cheaper at Sam’s than Costco. I think triple berry blend is $6.48 for 3 lbs and if you buy 5 you get $2 off. The POM brand of toilet paper/paper towel rolls is also a brand that we like and seems to be about 1/2 as much as Costco’s per sf form memory. I would love to see a comparison by you! FYI – you can usually almost get a Sam’s membership free – check slickdeals.com. I recently retired at 39 and have had extra time to optimize my life/spending.

    • Ryan, thanks for the great comments. We had a Sam’s membership for a while but prefer Costco for some reason. In hindsight it would have been nice to include Sams in this sheet. Perhaps I’ll do this comparison somewhat regularly.

      Love slickdeals as well, particularly when integrated with passive RSS queries. Congrats on retiring at 39. You’ve done much better than me! Is retirement all it’s cracked up to be?

  2. Interesting research. I wonder how much the region you live in affects prices for various products. In our area (Central Appalachia) we are fortunate to have Wal-Mart, Sam’s Club, and Aldi all within a mile of each other in the same shopping area (there is also a Kroger). Our experience is that we spend less money at Kroger than at Sam’s Club, mostly because despite our obvious intelligence (and humility 🙂 we cannot avoid the impulse purchases at Sam’s. Invariably we come back with 5 lbs of cashew pieces or 3 lbs of yogurt dipped pretzels.

    • Oldster, thanks for your thoughts! The compulsion to overbuy is a real thing at warehouses. We haven’t had many issues ourselves, but I hear horror stories from others.

      Self awareness is a great thing. It’s wise of you to recognize the tendency to overbuy at Sam’s and defensively avoid it.

      We have friends that have told us the opposite about Costco. That they feel horrible buying a large quantity of junk food so they tend to avoid such purchases while at Costco. But it could definitely go either way for sure.

  3. Professor ,

    Thanks for the great post, and selecting Costco. I was getting very worried Id need to start going to Walmart. My wife has tried Aldi and basically has refused to go back, not sure if it was the carts or the bags or the weird selection that put her over the edge. She feels the same way about Walmart. With Costco we found two keys. Number one be comfortable with the larger sizes just don’t buy a lot of perishable items. We found Costco to be great with nonperishables like paper products, batteries, soaps and detergents. We fill in the gaps and small items at Trader Joe’s.

    • Haven’t had much experience with Trader Joe’s but perhaps I should check it out. We are fortunate to be able to shop at Costco and not worry about food waste since our family devours everything by the time it goes bad.

  4. Your research left me “speechless” except to say I do have a few comments . . .

    I keep at my desk a copy of “Cognitive Bias Survival Guide, Manage the Mind to Make Better Decisions”. Looks like it came from something called Geek Wrapped. Found it back in May of 2017. Short read which helps me identify my own biases when I sense they are coming forward. Sorry that I don’t have a link to share. I’m certain you know of at least a few biases.

    Your crack on chickens was a little harsh. Dumbest creatures you’ve seen? Perhaps, but perhaps not. I have never seen a chicken pay (with money at least) for a meal, or for anything for that matter.

    Also If the thought of living in a cage is depressing to you then I would be open to hear you comments on cubicles and offices.

    And that moral dilemma you mention about the life in the cage and the suffering, seems secondary to the fact that you are eating their young. I mean come on.

    As a Food Waste Warrior I can’t leave without saying something about food waste. Buying in bulk sounds convenient, but it can (and I say only can) lead to additional waste. Be careful out there!

    And make your own applesauce. I know you “can”.

    Thanks

    • If offered between cage free eggs and normal eggs, which do you buy and why?

      We waste close to zero food and always have. Much of what you buy at Costco is non-perishable (toilet paper, dish soap, jams, peanut butter, rice, oatmeal, etc). Some of it is. The key is to not overbuy the perishable.

      Ahhhh, the applesauce. I’ll have to have you over again to help me out with that 48 hour long ordeal! We made a small batch again this year (only 100lbs) but are gearing up again for another 500lb batch. We found a UPick farm by our house that sells Jonathan’s for 50 cents/lb. Last year they were hit by a bad hail storm which destroyed a lot of their crop. Hoping that next year’s crop is much better.

  5. We don’t have a Costco or a Sam’s club nearby, but we have an Aldi 2 miles from our house. In the summer months we bike over there with a trailer and cargo bike to load up on our weekly groceries. There are some weird quirks (carts, inefficient check-out process, etc.) but once you get used to them it becomes second nature.
    They now accept Amex so I can use my Amex Blue Cash Preferred card (6% back on groceries up to $6k/yr) after the annual fee it is about a ~4.5% cash back card.

    I like that there aren’t as many options as Aldi has curated what kind of mustard I will select, etc. Their meat selection isn’t ideal, but we try to limit how much meat we eat anyways.

    Good article and it is great to see a cost comparison. I’m sure it varies by region, so I should probably do a similar analysis as well. Thanks for another good post.

    • I love the lack of options at Aldi & Costco. Mitigates “analysis paralysis” for me as well. I’d love to see other writeups as well to see if there are things I’m overlooking. I love stepping back and questioning the rationality of my every day decisions from time to time.

  6. Great timing of this article, as my wife and I just discussed over the weekend making a list of our everyday items and price checking them across Sam’s, Costco, Kroger (our primary store), Walmart and Lidl (another newer German grocery chain to the US market that has very competitive pricing…like a cross between Trader Joe’s and Aldi.) I am with you and absolutely despise stepping foot inside of a Walmart. The Sam’s in my area are almost identical to Walmart regarding the clientele, dirty stores, etc. so I avoid Sam’s as much as possible also.

    Do have one question. Is your decision to purchase non-organic food driven entirely by cost? Or is it something else? My line of thinking has always been that without your health, literally nothing else matters. I do question from time to time how much healthier organic options truly are, but even if it makes only a small difference, it’s still making a difference for our health down the road. (Aggregation of Marginal Gains!!!)

    • J, thanks for reaching out. My thoughts on Sam’s are identical to yours.

      Regarding organics, I had the uneducated opinion that they don’t matter much (“There is little scientific evidence of benefit or harm to human health from a diet high in organic food, and conducting any sort of rigorous experiment on the subject is very difficult” https://en.wikipedia.org/wiki/Organic_food#Health_and_safety). If there are certain and known costs (money in exchange for your time in a cube) and unclear health benefits, it’s not obvious to me that it makes sense to go organic.

      With that said, I’m vaguely aware of a hirearchy of foods for which it matters. Articles like this: http://www.pbs.org/wnet/need-to-know/health/the-dirty-dozen-and-clean-15-of-produce/616/

      It’s my understanding that it makes sense to go organic for the “dirty” foods and doesn’t make much sense to go organic for the “clean” foods. But I’m really uninformed on the topic. Happy to learn more if you have a good resource to point me to.

      By the way, if you follow through and do the price comparison, I’d be interested in seeing how it comes out for you. I love learning from smart people.

  7. With anything health related, there is never a “if you do this, then this will be your result 100% of the time”. Same reason some people smoke their entire life and never get lung cancer, and some never smoke a day in their life and end up with lung cancer. Marks Daily Apple is a site I’ll read from time to time which attempts to use science/research studies to back up their articles. ( https://www.marksdailyapple.com/so-is-organic-a-scam/ ). But honestly, I don’t have any great resources to send your way other than what anyone could find with a basic internet search. And even if I did, I am sure I could find one contradicting it just as easy.

    One thing I have personally observed over the years that has always just stood out as a little odd to me is the sheer size of the vegetables and even meats (look at how large non-organic chicken breasts can get) that are organic vs. non-organic. I have grown my own garden for years and years and could never get anything close to the size of some of the no-organic produce I see in the stores. Next time you are in a store that offers both, take a look at some bell peppers and you will see what I am talking about. Maybe none of it makes any difference and I am just paranoid and wasting money…haha. I am however doing my own independent study…will let you know the results in 70-80 years. 🙂

  8. Just responding to your question/comments from my earlier post.

    The USDA “rule” on “free range” is that the poultry is allowed acess to the outdoors. The term “free range” sounds nice and possibly even liberating to the fowl but “allowing access” can be as easy as providing a small door or hatch to a building with a zilion (lets just assume a large number here) hens in a egg producing facility. Understanding the above I really don’t believe there is much difference in life experience for the free range or non free range.

    Of course if you have a few different friends who raise chickens then you can see the conditions and usually get free eggs from them. Certainly not an option to everyone.

    Certainly agree that you guys don’t waste food. The comment was intended for the readers. Agree with your comment on caution on over buying on perishables.

    Someday we must do apples once more.

    Thanks

  9. I love this! I could not agree more with two specific things you said: that feeling of unhappy people, buzzing HVAC at Walmart and the randomness of the things in the retail aisle at Aldi. It is so strange that it makes me not want to shop at Aldi, LOL. I also agree that the checkout process at Aldi gets confusing – it seems they don’t help you bag anything, so for first time shoppers, it’s very inefficient. I also do an infrequent Walmart run just to stock up on a few things, then do most of my shopping at Costco & Wegman’s

  10. Your experience (and commentary) with ALDI seems to be based around things being a bit different than you are used to. From the cart, to the bags, to the retail aisle (the aisle of temptation as I call it), it seemed to be presented in a negative spin, but really seemed like it was just different for someone’s first visit (I honestly have a dedicated quarter that I leave in the car specifically for ALDI). Think how weird it would be for someone who’d never been to Costco… “You mean I have to pay a membership to shop?”, “Seriously, TVs and car tires at your grocery store?”, “I only needed a jar of olive oil, not 3 liters of the stuff”. I was surprised some of your items that showed up as N/A at ALDI are regularly instock at mine (notably batteries, natural peanut butter, almond butter, tortillas) . Could have been variability among stores I guess. Personally, my biggest gripe with ALDI is the puzzling lack of some produce (jalepeno for example) and some dry-goods staples (lentils, regular ole brown rice). As far as bagging goes, I use a standard (washable) cotton bag for meat, which gets thrown into the laundry, but everything else pretty goes into a single large blue IKEA bag. I can get pretty much an entire cart of food into the house in one trip with that thing.

  11. I’m the weirdo that prefers the Aldi checkout process because I’m a perfectionist about how my bags are packed. At the regular grocery store, I always try to find the lane without a bagger so I can do it myself. I pack my bags according to where those items belong when I get home (and then pack heavy/boxy at the bottom, light/random shapes at the top). For whatever reason, I’d rather spend the extra couple of minutes packing them carefully in the store than spending the extra time at home to put them away (or having something get crushed).

  12. Thanks so much for this article! I tend to agree with you on almost all of your points. I love Costco for dry and paper goods, our favorite Rao’s spaghetti sauce, coffee and some fruit, and frozen veggies, fruit and salmon. Their organic chicken is excellent, too. I do have to watch the overbuying of snacks and of just general “overstocking” (buying stuff before we’re truly out of it, like dishwasher detergent pods). That can turn a $100 bill into a $300 really quick. I’ve tried ALDI several times and I just don’t get the cult of it, and I always feel like I’m being judged or frustrating other customers by not moving fast enough, not getting the stupid cart out fast enough, not bagging fast enough, etc. One place that I’ve been buying some things at is Fresh Thyme (which, for instance, had our favorite almond milk creamer on sale for half off recently) and also paying close attention to the circulars that come in the mail and shopping the sale/loss leader items at the grocery stores and also buying meat only on sale. One of our stores had a buy-one, get two free deal on English muffins (of which we eat a lot), for example.

  13. Just an FYI that doesn’t apply to the point of the article, but I do think is applicable. I noticed some of the comments any our commentary mention going into Wal-Mart is such a drain and I totally agree, it’s depressing sometimes. However Wal-Mart does offer an app where you make all of your choices and then just go pick it up at the store, someone brings it out to your car, loads it up and you aren’t allowed to tip them. With that in mind I am sometimes willing to overpay a bit to keep from aimlessly wandering around looking for where they keep the basil now and also I save time in line, picking my own goods, the walk back and forth to the car. I know those sound like small items, but it adds up, if I go shopping once a week that could be an hour a week pretty easily.

  14. Couple of other things to keep in mind. I eat lunch for free at Costco with all the free samples and if we are still hungry the cafe is super cheap. I also get back lot’s of money as an executive member plus more with their credit card.

    Then their is the joy of the experience of Costco versus the other two!

  15. We stopped buying in Walmart, and kind of stopped buying from Costco. We’re a family of 2 (with my husband away during weekdays and only home on weekends), and to buy stuff in Costco means we have to buy so many things at once (since they sell in bulk). Since we don’t want to waste anything, we decided to just buy what we need, hence our overall winner is Aldi.

    For Walmart, it is very inefficient – the lines are long, they want you to buy other crap as you walk around the store, and it is the farthest store from our house.

    All depends on your scenario/what you value.

  16. Rocky, this is Mrs. Frugal Professor. You are totally speaking my language. Going to Costco does bring me joy. 🙂 Plus, I also love eating lunch for free at Costco. The Frugal Professor and I ran across this youtube song about lunch at Costco that makes me smile every time. https://youtu.be/6WkPyWIuTTM When I pick up my kids from school they often ask if we can go get our after school snack from the samples at Costco. 🙂

  17. How about the hour standing in line at Costco? I love the quick checkout at Wal-Mart. Honestly, though, I don’t have an Aldi or Wal-Mart close enough to me this comparison worthwhile.

    I have found the sale prices at Vons and Ralph’s plus coupons to be much cheaper than the Costco prices. And, Trader Joe’s has really cheap everyday prices for many things I buy: frozen fruit, eggs, organic dairy, wine.

    Thanks for doing this comparison. I hope an Aldi opens near me soon.

  18. We are a family of 6 and to say we watch our budget is an understatement. For the past few years my grocery shopping developed into a once a week experience visiting 2-4 stores for the best deals (stores that were close in proximity to each other). Those stores were Hy-Vee (fuel saver rewards), Trader Joe’s, Fresh Thyme, and Aldi. I would buy the necessary items with perhaps a hand full of extras but nothing more. Yet I still felt frustrated at check out because I knew there were people who spent even less than I did with my same family size and we had little food storage.

    So I started to shop mostly at Aldi. I was saving a bit more however the experience was not pleasant and we still had no storage items. Aside from the watermelons all other produce spoiled quickly, the shelf stable packaged items lacked in both flavor and substance and I found I had to add extra spices to make the sauces and mixes palatable (which drove up the end cost), the quality of the dairy tasted questionable, and the look of the meat section alone made me avoid it entirely. But I kept shopping there making it work as best I could. Every. Dang. Week.

    Two months ago I got a Costco membership. Honest truth: just driving to the store the first day gave me a panic attack. Buying in bulk?! Save me from the heart attack that is going to occur from my total bill at check out! (And they still won’t have everything I need for weekly recipes!) But friends encouraged me to try it and since it was a low risk investment I decided I’d white knuckled it and jumped in.

    Well, I started shopping and realized I was spending the same. Then a really cool thing happened as I started to adapt. I began pantry cooking basic meals that we now rotate through weekly (using slight variations) which makes life much, MUCH simpler and far more efficient and for regular shopping I only need to shop at Costco. And because I have storage items from bulk purchases I’ve started spending LESS.

    In addition I can now go three weeks in between grocery trips, spending an average of $100 per week including household items. I’ve learned to process fresh food so it lasts long and fits in our not so big refrigerator. That big bag of spinach? Treat it right and it will last 21 days, baby. Plus, good bye spending 1 of every 7 days shopping/planning/prepping. (That’s an added 2-3 days per month that I now have open.)

    And lastly since those extra impulse items don’t exists at Costco and I can in no way justify buying a bulk case of Oreos on a regular basis (that cost is equivalent to four loaves of bread- no contest) we have little to no junk in the house. So guess who’s BMI% has dropped? 🙂

    Costco was TERRIFYING to start but is proving to be an amazing choice for us.

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