Friday, February 22, 2019

Costco


Yes, I know you do not have to come to Hawaii to visit a Costco and you have a Costco membership you use where you live. We do too. We seldom use this card in Minneapolis because we seldom purchase food in bulk and because it so easy to get to other stores. We usually purchase from Costco in Minneapolis when we are heading for the lake and know we will have a crowd. Bulk sizes are useful for such outings. I have no idea if Costco is superior to other big box stores when it comes to price, but I have always heard that Costco does better by its employees and all things being equal that would be a good reason to make this our big box store. The article I link to here does a nice job of summarizing Costco strategies and benefits.

Costco in Hawaii is a different experience. Island costs for staples are significantly higher than back home and Costco offers a cost effective alternative.  Gas is probably the best example. The article I reference claims the general cost advantage at Costco is 12 cents and this is understood by Costco as a way to attract customers who might also shop in the store. I think this is what business folks call a loss leader. The price differential here is between 50 and 60 cents a gallon. The total differences can be substantial - 50 x 14. The lines for gas are always lengthy, but move quickly. We put on a lot of miles especially when we have guests so this difference is meaningful even if getting to Costco may take a little time. We don't purchase all of our food at Costco here, but a much higher percentage than we would purchase in Minnesota. You can even get an acai bowl in addition to your $1.50 hot dog and soda. No acai bowls in Minneapolis. You can purchase acai in the frozen goods section if you want to make something yourself. 



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