Discount retail woes: a quick tour

GROCERIES ONLY:
I’ve been the department manager over groceries/dairy for 2yrs now at Walmart and when it comes to the cheapest prices in town…it’s Walmart, hands down. If you enjoy the selective memberships that retailers have to offer Sams is the next cheapest. Once a week we are required to go to all of our competitors (Tom Thumb, Randalls, HEB, Kroger, Fiesta, COSTCO, and even SAMS) to check their prices and ensure our customers are getting a better deal. If our competitor is lower than us we’re required to go 10% lower than them. If in a sales add our competitor is lower than us a customer can bring the sales ad with them and we’ll match the price. How can you beat that???

I have been a member for years and used to work at the corporate office. I have found that the quality of the frsh foods is way down. Produce experiences include oranges that are all dry when you cut into them, potatoes with black centers and onions that are completely soft and mushy. I also purchased meat the was so foul that when bagged in three layers of plastic wrap and you could still smell it. Of course they took the meat back since it was purchased just fifteen minutes before, but I saw no one scrambling to get the huge case of lamb racks off of the floor. How often to customers like me get the bad food, don’t bring it back and just stop shopping there? As a rule, now, I use Costco for non-perishables only. Although the economy may be a significant factor, it should be considered that if the value was there, this would be the perfect time for folks to flock to Costco if the quality was consistant.

Ref the membership fees; Costco is able to maintain set thin product markups b/c of the revenue generated on membership fees. Most of thier profit is from the fees and other non-sales business (travel, AMEX cards, etc) If you eliminate millions of dollars in fees, guess where that revenue will be make up? COrrect, increasing the prices of products. COSTCO’s business model works and works well. Walmarts temporary surge is only that, temporary, just like McDonalds – another completely predictable result of a country in recession.

A lot of items in new jersey’s costco are way higher than even walmart (not to mention SAMs) higher prices + membership fees? dream on buddy!

Costco is quite possibly the best thing since sliced bread. I pay $300/year so my whole family can shop there and I still net a profit on the Amex rebate after paying the membership dues with it. Not to mention the amount I save on food, gas, TVs, furniture, Insurance, and everything else.

$50 fee reduces shoplifting and prevents them from being accused of racism.

Cosco has gone to private label…so then you have no idea of quality or comparison….and therefore no reason to go there…plus if you factor in the once a year price to belong….there is a creditability factor….

Regarding the complaints, realize first that it is simply impossible to please everyone. Their prices on most items are great, especially gas, clothes, prescriptions, contact lenses, and even the food court. Many items they sell are packaged exclusively for Costco. That makes it difficult to compare prices (on purpose). Use their American Express card and the annual rebate more than pays for the membership fee. Costco’s return policy is 1,000% better than most stores including Target & Best Buy. There are 3 Costco’s close to me. Each one has items the other Costco’s don’t carry. It’s because they can have different Buyers for each store. I shop at Costco’s several times each week. Their biggest pitfall to me is service. Most employees (not all) are not friendly, including managers. They simply don’t put the customer first. That’s a direct reflection of management & training. I am very willing to put up with that, for the price savings. You go to Costco for price, not personal service. But I work in the service business and it’s amazing to me that they do so much business without courteous employees. Often the cashiers and clerks at the doors don’t offer a greeting, a “thank you” or a parting comment. In contrast, I’ve noticed the employees at my local Home Depot’s are starting to be very courteous, helpful and friendly. Obviously Home Depot corporate has told them to do so, to help insure the doors stay open in this economy. Costco overall is a great store.

If you don’t want to pay the 50 dollar fee you can buy Costco gift cards on ebay that lets you shop there as long as there is value on the card

I want to say that I can’t believe what I am reading but unfortunately I can. This is a solid case of “penny wise and dollar foolish”. I have an Executive membership at Costco and have been a member since 18. Every year I get multiples of my membership fee back as a check every year so I am effectively paid to shop there. In addition no one beats Costco on paper products, gas, and I believe diapers as well. I have no loyalty to any company other than the one with the best price and regularly search the internet with my iphone in the aisles to verify I am getting the best deal. Costco can’t compete with the internet on electronics or diamonds and is 50/50 with alcohol but they are better than any other major retailer and that is where most people shop. How can you not like a place that pays you to shop AND delivers cheaper prices?
Most people want convenience so if that is the case don’t blame the retailer.
One other tidbit of info, the rich and the poor shop at places like Costco, TJ Maxx, and every other discount retailer. The rich because they understand the value of their money, the poor because they have to. Only the middle class feels the need to spend full price. The problem is there is no such thing as a middle class, unless of course you believe that only having 2-6 months salary in the bank and a new car is somewhere between rich and poor.

try Aldi, cheaper and no membership fee, very few brands but great quality products.

Comparing Costco to Sam’s Club is like comparing Obama to GOD. We all know which one is better( Change…Hope ). Sams Club is full of white trash and never busy. It’s like a Rosanne Barr, Rosie O’Donnell run day care center.

I shop for our family of 4 at Costco at least once if not twice a week. To feed a family nutritious, whole food they are far superior to Sam’s Club or BJ’s which is predominantly processed. Costco’s fresh produce is fantastic and generally a great deal. The quality of their products is very high and they have a more than fair return policy if you’re not satisfied for any reason. I also find that the employees are generally friendly and helpful. The $50.00 or $100.00 fee is nothing compared to the savings and then the $250-$300 rebate check we get each year. I don’t shop there because of the rebate check. I shop there because they have a great abundance of whole, unprocessed and organic food at very reasonable prices. If any store will make it through this downturn, Costco will!

My life is simple:
Walmart + Superstore + Canadian Tire

So.. I don’t think COSTCO have any chance to survive in 3 years? Keep it simple:
1 Compare the price!
2 Store location!
3 Terrible service!
World is so big, why go to COSTCO!

I am a very satisfied Costco shopper. But, I know when to buy at Costco and when to buy at another retail location within the area.

Reasons I would recommend Costco:

#1 I believe Costco will refund your membership price if you are unsatisfied.
#2 The return policy at Costco is very cusomter friendly.
#3 If you are near a Costco gas station, you will typically save $0.05 per gallon or more as compared to surrounding stations.

For me, with an executive membership and costco american express, I more than recoup the cost of membership.

No, I do not own Costco stock.

If you think costco prices are less, you need to shop around more. Their prices are less than the regular sale prices but almost all the time you can get items that are better priced than costco and you don’t need to buy in bulk. You can easily find a gallon milk for less than $2. For getting $400 cash back at 2% you need to spend $20000. There are many cards out there that will gives 2-3% cash back

I encourage more people to stop shopping at Costco because they don’t like the $50 fee. Us that Save the $50 per trip alone, would love to have less people to fight while shopping! If your buying the right products, and still compare shopping, you’ll save your membership fee, times 20!

There margins are razor thin so they’ll never abandon membership fees. Luckily they treat their employees like garbage. Most of them are routinely kicked to the curb during the holidays so they can rehire cheaper employees.

I think costco is way too high compare to Sams,the only thing that Costco has over Sams is Electronics, do you also know if you find similar item you could match it with Sams? and give you so called 2 yr warranty with it too.
Im a super shopper …name me one item that Costco has isnt higher than Sams?
I love Costco bread though…
Look for instance their XBOX bundle PS3 WII sony top of line Vizios.
Got my TV Vizio XVT 42 LCD 120 for $699 shipped …Costco has it for $999 now ..bit that costco.
Im a member of Costco and Sams.
Their Meat for instance is way too high than Sams I love Sams I live there… I even know their price code …
You notice with sams they have 81 and the end of their price or 88 91.
thats how long they had an Item.
I should be on 20/20
Costco doesnt have good deals …
Don’t have clearance rack like sams.
I bought my 20″ vizio for $100 refurbished
Enough later

The membersip fee for Costco is established so they can offer discounts on products like tobacco and alcohol that are far below the regulated price structure determined by some states. By charging a membership fee it allows Costco to show that the general public does not have access to these prices, only those willing to pay a fee. As for not paying a fee to shop somewhere is your choice. My opinion is that you pay a controlled fee upfront or get hosed by fees in the form of a normal retail margins. I used to work for Costco and I can tell you that they care more about their members than they do about their stock price. If there is anything this economic downturn can teach us is that sucessful companies care about where their money is coming from.

The $50.00 buck barrier is nice. It ensures that the customers are nicer and that stores are cleaner.

We are a family of six and probably save our annual executive membership fee on milk alone. Costco is our major source of food items and things like paper towels, toilet paper (yes, Costco IS cheaper on this no matter what you’ve read elsewhere) and cleaning products. Executive membership is great – returned us like $400 last year for our $100 executive membership fee. Great store, especially for these difficult times.

Costco is great for us. We save a lot on gas, food, and electronics. They also have great deals on services as well such as insurance and others. I bought my tires from their store, with the coupon of course. And with that, we get free tire rotation and tire inflation for the rest of the tire life. That alone worth more than the yearly fees.

It’s ridiculous to think that Costco’s prices depend on my membership fee, which is a mere fraction of our typical bill there.

Drop the fee and you’ll get more shoppers. Once they’re in the store you’ll get you fee back, and some.

I’ve been a member for quite some time and won’t give it up. Even with a small household, I have saved more than my membership fee many times over. If you know your pricing and shop smart, Costco can beat everyone else. You also can’t beat their return policy.

I LOVE costco. membership fee. yeah, you can make more with their exec. membership.

Americans pay $8B for bottled water when they can get it for free out of the tap… obviously lower prices are not the silver bullet for retailers to attempt to gain market share and/or lead their markets. Escaping this destructive cycle lies in focusing relentlessly on your customers rather than your competitors. Your customers are better informed about their purchases than ever before, but are you learning as much about them and how they view your products? Scientific micromarketing allows you to assess how each customer values your product and offer that exact price every day in every market. Price is the most important lever at the organization’s disposal to influence demand, revenues, and margins. It’s time for retailers to adopt a new practical solution (especially in this market) that is based on science and mathematics, and it’s called scientific micromarketing.

The $50 we spend on the Costco membership is made up in two months at their gas stations. They are alway 10-15 cents per gallon under the retailers price. We also get 2% back on our purchases using the AE Costco Card and that is usually over $200 a year. $50 is nothing.

I AGREE….DELETE THE YEARLY FEE….WATCH SALES INCREASE!

Without the membership fee they could not offer the low prices and you would still not shop there.

Same Here

I too quit shopping at costco because of the membership fee

I love Costco, the member fee is naminal to the benefits you get along with the deals. I think I’d live there if I could.

@Robert Mills

Uh why? I save so much by having a membership at costco. The discount on cleaning supplies alone is worth the 50 dollars a year

I would vote for higher membership fee, and keep the goods’ price low or lower.

Costco works if you plan well. I use a Costco-Amex cobranded card which gets me 2% cash back on all my purchases at Costco. I get 2% additional off at Costco on fuel and that’s on top of the rate that is 15c-20c cheaper than other pumps.

On a yearly basis, if I account for fuel purchases of $1000 for my car and my wife’s car, I save $20 as cash back and another $50-$100 on gas prices which more than compensates for the $50 membership fee.

I love to buy wine, fruits, diary and cereals/breads/nuts there. Overall I can tell you, I will save money at Costco.

Ronny

I pay the executive fee, $100. You get 1% back on all purchases except gas, every year that membership pays for itself.

I second what Robert Mills said below with a twist,

The other day, I went BULK food shopping at wal mart and the cashier asked me, “How come you dont go to Sam’ club”

I responded with “Why would I want to pay to shop”…..are you kidding….

So yea, Kuddos to Robert, I think the days of “paying for discounts” are over

If you use the American express Card the 1-2% you will get back will pay for this fee plus and the card has no fee….. you don’t make any sense? you saving 50 but losing 100 plus!

While the membership fee is a bit of an added burden, I feel that it is more than worth it for the way that I shop. I normally drop $500-$700 per trip at costco with the majority of that going to bulk items/frozen foods. I probably save more than the membership cost every time I shop.

I purchase the Executive membership, and I more than get it back by the rebates Costco gives. Add the AmEx card rebate on gas, and I am making money! Costco is now my first stop for groceries.

We have been a member of Costco for over 8 years. We dropped our membership last Nov. 2008 due to the $50.00 yearly fee. Could not justify spending $50.00 for the “privilege” to shop there. Costco has some good deals, but they are not competitive on alot of items.

I think the $50 membership is worth it if you are savvy enough to 1) only buy something that is actually cheaper and/or you will use all and 2) you spend enough there rto make back that $50. I just bought a 26″ lcd for my computer that was $80 less then anywhere else, that paid for my membership and then some

The Costco membership fee IS discretionary spending that I am no longer willing to pay. I’d continue shopping there if I didn’t have to fork over $50 for the “privilege” to do so. For now I shop elsewhere.