With the holiday slew of gift-giving, family meals, and festive gatherings on the horizon, savvy shoppers will inevitably seize on the many value purchases offered at Costco.
While you can buy mayonnaise by the gallon, one of the more underappreciated benefits of Costco is its ability to offer high-quality food at incredibly competitive prices.
In this piece we’ll cover:
- Costco’s business model
- Kirkland Signature brand
- and, healthy foods to buy at Costco
Let’s dig in.
Costco’s Business Model
At the heart of Costco’s success is a business model that defies conventional retail wisdom—instead of maximizing profit margins, Costco obsesses over minimizing them. This counterintuitive philosophy is centered around prioritizing customer satisfaction over short-term gains.
Costco’s co-founder, Jim Sinegal, famously prioritized keeping costs low for the consumer. He was once quoted saying to employees:
“If (saving the customer money) doesn’t turn you on, you’re in the wrong business.”
This ethos is woven into the company’s DNA, evident in their capping of markup on branded items at a scant 14% and private-label items at just 15%, contrasting sharply with the significantly higher markups at traditional supermarkets and department stores.
So how does Costco make money?
- Membership fees.
- High volume sales.
A standard annual Costco membership runs $60.
This fee not only generates direct income but also fosters customer loyalty.
By paying the fee, members are incentivized to maximize their investment by concentrating their shopping at Costco, which feeds back into their high-volume sales model.
High Volume Sales:
By selling in bulk, Costco is able to aggressively negotiate prices with vendors.
To do this effectively, Costco offers a limited selection of goods and merchandise—around 3,700 carefully curated items per warehouse, compared to the 40,000-50,000 found in typical grocery stores.
This strategy not only simplifies shopping, it also increases the turnover rate.
This rapid turnover ensures that the produce and perishables like the 0% fat plain Greek yogurt or the wild-caught salmon are often fresher than what you might find in a standard grocery store.
Kirkland Private Label = Familiar Producers
We’d be remiss to write this article and NOT mention the unsung hero of Costco: the Kirkland Signature brand aka Costco’s private label.
Some people may scoff at Kirkland, but they are missing out.
Kirkland rivals (if not surpasses!) the quality of leading national brands, and that’s because it’s typically produced by a leading national brand:
- The signature coffee is roasted by Starbucks.
- The albacore tuna is supplied by Bumble Bee.
- The organic peanut butter is courtesy of Adams.
- The batteries are produced by Duracell.
Your Smart Costco Shopping List
Back to healthy eating!
One way to make the most out of your Costco membership, at least when it comes to food, is to focus on single-ingredient and/or minimally processed foods.
Fruits and Vegetables
- Organic spinach or baby kale
- Baby carrots
- Frozen mango chunks
- Frozen blueberries
- Frozen berry mix
- Organic lemons
- Sugar snap peas
- Romaine lettuce
- Yams/Sweet Potatoes
- Dried figs (great for endurance athletes)
- Ground organic turkey
- Wild-caught salmon
- Frozen salmon burgers
- Boneless skinless frozen chicken breast
- Rotisserie chicken
- Canned sardines (a Dennis favorite)
- Almond or coconut milk—unsweetened
- Kirkland plain Greek yogurt
- Lundburg’s organic short-grain brown rice
- Banza Chickpea pasta
- Raw almonds
- Raw Brazil nuts
- RX Bars
- Harvest Stone organic quinoa crackers
- Kirkland protein bar
- Hemp seeds
For the 42% of Americans not yet in the Costco club, think of this as your nudge to join the party.
And for the Costco vets, well, it’s always good to know your smart shopping is backed by some solid strategy.
So, whether you’re stocking up on the essentials or prepping for the mother of all holiday feasts, remember that nourishing your body doesn’t have to break the bank.