Savingmoneywith
Costco
in the news
a Costco membership
THE SIX;WORD strategy for saving on food
from Kiplinger’s Personal Finance magazine
(March, 2009): “Get in car. Drive to Costco.”
The magazine compared prices on 37 staples
at Costco, Safeway and Whole Foods, calculated the prices for equivalent sizes, multiplied
the total for each list by 12 (representing
monthly shopping expeditions) and added
Costco’s $50 annual membership to the cost.
Result: “Costco can supply a family of four
with many of the basics for an annual tab of
$1,708, followed by Safeway, at $2,417, and
Whole Foods, at a pricey $3,498.”
To back that up, Kiplinger’s October 2009
cover story, “Your Spending: Rein It In,” details
Costco members Joanna and Adam Abrahams’
(pictured at left) crash course in household
budgeting. The Silver Spring, Maryland, couple had to take a hard look at their spending
when Adam lost his job as a lawyer for a title-insurance firm in late 2008. Although Joanna
kept her job as an attorney for the U.S. Office
of Personnel Management, they had to rethink
their finances so they could afford child care
for their two daughters plus make payments
on their mortgage, their law-school loans and
their credit-card debt.
One of their belt-tightening measures:
signing up for a Costco Executive Membership—which cut the family’s grocery bill by a
third and provides 2 percent a year in merchandise rewards. C
How it all
began
Down under
up and running
AN ARTICLE IN Fortune
Small Business in
September 2009 detailed
Costco’s development as
it went from concept in
1983 to $1 billion company in just three years.
Interviewing founders
Jeff Brotman (now
Costco’s board chairman) and Jim Sinegal
(Costco president and
CEO), FSB reporter
Lenora Chu was able to
elicit answers to questions such as where they
got the idea for Costco
(Paris, says Brotman;
Price Club, says
Sinegal), how the business was originally
financed (credit cards),
their original growth
predictions (no more
than 12 Costco locations,
primarily in the Northwest, with $1 billion in
sales) and how different
the predictions were
from reality (now more
than 560 locations
throughout the United
States, Canada, the
United Kingdom, Japan,
Korea and Australia, and
$70 billion in sales). C
MELBOURNE, AUSTRALIA’S Herald Sun
reported that shoppers started lining up at
5 a.m. to be among the first through the doors
of the new Costco warehouse, which opened
on August 17.
The keenly anticipated opening attracted
thousands of shoppers.
“We had about 900 people come in the first
half hour, and about 450 shoppers coming every
half hour [after that],” said Patrick Noone, managing director of Costco Australia.
Among the early shoppers, reported The
Age newspaper, were Colin Sandlant and Kate
Griffin, who stayed with friends in Melbourne
on Sunday night in order to get to the warehouse before the doors opened at 7: 30 a.m.
Griffin, who emigrated from California 14 years
ago, says she has missed the retailer’s presence
here. “I love Costco. I shopped at Costco in the
States for years,” she said.
Sandlant said Australians have been wanting more competition in the grocery market.
“There are a lot of people out there who are
only working part time jobs, so the prices will
TIMOTHY BURGESS
Costco members shop the new Melbourne,
Australia location, which opened in August.
suit them a lot better,” he said.
Taking a tour of the warehouse, Victorian
Premier John Brumby told Australian Food
News that Costco would provide a boost to the
local economy.
“Costco’s arrival will deliver great opportunities for local manufacturers and suppliers to supply the store and potentially tap into Costco’s
worldwide distribution network,” he said.
Trade Minister Martin Pakula said,“Costco
will increase competition in the retail sector and
provide choice for Victorian consumers.”
“We look forward to contributing to the community in many ways, and to making a positive
impact on the local job market,” said Patrick. C
Kirkland Signature wins praise
IN THE OCTOBER issue of a
national consumer magazine,
trained taste testers compared
18 high-fiber cereals on the
basis of nutrition and taste. They
selected their top seven, and
Costco’s Kirkland Signature™
Spiced Pecan cereal topped the
list with a rating of “Excellent.”
“A flavorful blend of toasted
grains, fresh nuts and seeds,
with a big cinnamon-and-nutmeg
flavor, and just 33 cents per serving,” wrote the magazine.
The same publication compared store brands with name
brands in an article, “It pays to
buy store brands,” that showed
that the price, not the quality,
was often the only difference.
For instance, comparing
McCormick Pure Vanilla ($3.34
per ounce) with Kirkland
Signature Pure Madagascar
Bourbon Vanilla ( 35 cents per
ounce), the magazine concluded that either would work
just as well. Frozen strawberries (Dole versus Kirkland
Signature) showed the quality
was the same, but the Kirkland
Signature berries were almost
half the cost of Dole’s. C
