What is better Walmart or Costco? (2023)

What is better Costco or Walmart?

If you're purchasing household essentials like eggs in bulk, then Costco is probably your better bet. The same generally holds true for bulk produce items, like fruits and vegetables, as well as meats and certain dairy products. But Walmart can be very competitive on things like toilet paper and paper towels.

However, each Costco store generates far more revenues than Walmart's. Costco has a more affluent customer base, a differentiated business retail model, and executed well domestically and in international markets. It has delivered strong KPIs, revenue growth, and operating leverage.

Low Prices

Costco's business model is to collect fees from members and sell items in bulk, while Walmart is a traditional retailer that aims to push its prices down.

When compared to other similar retailers, Costco's competitive advantage lies in its own private label, its discount prices, and its membership dues. This has provided customers with a product that they can rely on at low prices. It is also a stable business model that investors seek as a good investment.

Also, as the long-standing largest retailer in the world, the Walmart corporation is a much larger company than Costco.

And the overall winner is… Costco! The store offers lower prices on 6 out of 11 products we surveyed (not including the tie). Unit price comparison is just one way to see if you're getting a good deal.

Costco business philosophy

The company's guiding philosophy is to offer its members goods and services at the lowest possible prices. Thanks to its low prices and excellent customer service, Costco has become a favorite shopping destination for millions worldwide.

Costco Wholesale employees rated their Recommend to a friend 22% higher than Walmart employees rated theirs.

Walmart's success can be attributed to having their own supply chain to streamline fulfillment and cut down on costs. It also provides them with more control over their logistics network. In this article, we take a closer look at the Walmart supply chain and why it continues to be so successful decades later.

What made Costco so successful?

In reality, Costco is a master of the retail game and generates huge profits for its shareholders. The company's profit strategy is to sell products at relatively low prices to move a large product volume. Costco's profitability also relies on its membership fee to earn significant profit and retain customer loyalty.

Costco is known as a low-price leader, but as the big-box and warehouse store landscape becomes more and more competitive, it's getting harder to find unbeatable deals. Despite this, Costco still has some major purchasing power, which helps it keep costs way low.

Conclusion. If you're just shopping for food at Costco, the savings aren't as competitive for the same items you'd find elsewhere, so the $60 annual membership fee might not be worth it for you. But other in-store brands are really on par, quality-wise, as Costco's Kirkland Signature brand.

In general, Costco is worth it if you live with two or more people, you live within 20 minutes of a location, you have ample storage space in your car and home, you plan to spend at least $2,000 per year, and you are a Visa cardholder.

A successful private label gives Costco more control over its operations. Because the company's signature brand accounts for a substantial amount of sales, Costco relies on less suppliers and requires lower inventory levels than other retailers.

Its high wages are the most frequently mentioned reason why its employees are happy with their jobs. Costco values its employees and compensates them well for their time and commitment to the company. Not only do they offer great starting wages, but it has also been at the forefront of minimum wage increases.

To perform Costco cashier jobs successfully, employees should possess above-average communication skills and basic math knowledge. Costco cashiers and other store employees must also work in a busy and fast-paced environment with coworkers and customers of various backgrounds.

Toilet paper

I don't like spending money on toilet paper, but it is a constant need. I am probably not the only one thinking that Costco's best-selling item is toilet paper. It sells more than a billion rolls every year of the popular private-label Kirkland brand.

Costco Wholesale Corp's (COST) main competitors in the highly competitive retail market of large discount stores are Walmart Inc. (WMT) and Target Corporation (TGT). These companies are also sometimes classified as consumer defensive stocks.

What store is bigger than Costco?

With over 11,500 stores globally, Walmart is the largest retailer chain in the world and the top Costco competitor in 2021.

Highest Paying Jobs At Walmart

The higher paying positions at Walmart include software engineer, co-manager, inventory management specialist, and department manager. A worker with the title software engineer salary at Walmart can earn an average yearly salary of $123,821.

You can work for both.

Batteries may give you the most in savings when it comes to buying at Costco instead of Walmart, but there are other items you may want to buy in bulk, too. According to the report, consumers can also save 50 percent when purchasing a 24-pack of bottled water at Costco compared to just a single bottle at Walmart.

Though the cost-per-unit of bulk items are tempting, Costco's annual fee won't pay off if you aren't stocking up regularly. “Even though you may have saved money on the price per unit, you'll end up spending less and wasting less by buying a smaller package at another store,” Rossi says.

Costco is well-known for being a bulk retailer. This model ends up being financially favorable for the company. The reason why is quite simple: Costco receives a cheaper price for buying items in bulk, and then sells them back to the customer at a higher price than what they paid for the items.

What is the busiest Costco in the world? The Iwelei Costco on Oahu Island in Hawaii is the busiest in the world. Costco estimates that 1 in 4 residents of the island are Costco members, and with Oahu having a population of over 950,000, it's easy to see why this location gets a lot of foot traffic.

Costco is a wholesale retail store known for its great bargains. It offers food samples, cheap gas, and sale items to attract customers and make their shopping experiences worthwhile.

According to Careerbliss, the vice president of retail sales is the highest-earning employee at Costco, with an average annual salary of $201,000. On average, the lowest-earning Costco employee makes about $18.05 per hour or $34,000 annually.

What is Walmart's greatest strength?

1. Being the largest retailer in the world, with unmatched scale of operations and strong market power over suppliers and competitors. Walmart is the world's largest company by revenue. It is also the world's largest private employer, with more than 2.3 million employees.

"Walmart sells just about everything you could ever need so planning a trip to this big box retailer could make your life easier and reduce the need to go into multiple stores,” says consumer savings expert Andrea Woroch (opens in new tab).

( /ˈwɔːlmɑːrt/; formerly Wal-Mart Stores, Inc.) is an American multinational retail corporation that operates a chain of hypermarkets (also called supercenters), discount department stores, and grocery stores from the United States, headquartered in Bentonville, Arkansas.

Costco's Weaknesses (Internal Strategic Factors)

Limited product mix. Exclusivity to members. Low profit margins.

To start, the company pays well above the typical salary that other retail companies pay, even for entry-level workers. “They have a graduated wage program that's based purely on total hours worked. Show up, do your job, and your pay goes up on its own,” says one employee.

Costco's members are extremely loyal. This is likely because Costco is known for selling high-quality items at affordable prices, which customers love. It also doesn't hurt that shoppers who know a few ingenious Costco hacks can save even more when shopping there.

If a Costco price tags ends in . 99, it's a full-price, regular item. If your favorite item end in . 99, you may not be saving money, but it will most likely still be around the next time you shop at Costco.

99) 69 and 79 cents may seem unconventional, and they are, but these odd ending prices indicate a test-ride of a product by the manufacturer offered at a price lower than Costco would like.

We'll make it very clear and simple for you: the $120 annual fee for the Executive card is worth it if you spend more than $500 a month or $6,000 a year total at Costco on eligible purchases. Those are the exact numbers needed to get $120 in rewards and break even on the extra yearly cost in the membership fees.

No; what most non-Costco shoppers don't realize is Costco only carries the top brands. The store brand, Kirkland, is consistently rated as high as its branded counterparts. It's about value; no low-quality, no-name brands.

Why is Costco membership so expensive?

We strive to give our members the best products at the lowest possible prices, and our membership fee allows us to offset many of our operating costs and price our merchandise lower.

Costco announced in late September that shoppers would be seeing inflated prices due to escalating shipping prices; supply chain issues; higher labor costs; rising demand for transportation and products; shortages in computer chips, oils and chemicals; and higher commodity prices, CNBC reported.

Are Costco Meat Prices Competitive? Costco tends to run on the more expensive side. This is especially true when compared to supermarket specials and coupons that often undercut Costco pricing significantly. But when comparing the Costco price to your local butcher shop, Costco will usually win.

Costco is known as a low-price leader, but as the big-box and warehouse store landscape becomes more and more competitive, it's getting harder to find unbeatable deals. Despite this, Costco still has some major purchasing power, which helps it keep costs way low.

$60.00 Annual membership fee* Includes a free Household Card. Add Affiliate Cardholders for $60 each* Valid at all Costco locations worldwide.

Costco's pricing strategy

Costco prices products at 14-15% markup above costs. This gives it an average profit margin of just 2%, and positions the brand firmly within the wholesale market. The reason the company is able to offer such low prices is because it sells products in bulk.

One Reddit user and Costco employee says it can be difficult working as a frontend cashier at the store and having to push its programs. Supervisor positions can also be difficult because you're “babysitting” employees and people are often upset with you. But the worst job? Entrance door service member.

The easiest job at Costco is a front end assistant, and most entry-level jobs start at this position. Other jobs that are easy for employees at Costco include all entry-level employees like a cashier assistant, food service assistant, food court worker, or customer service representative.

Costco is not hard to get hired at, but it does require some preparation. You'll need an up-to-date resume and references from previous employers to apply for a job there.

The candidates should answer the Costco supervisor interview questions precisely, maintaining calm, composure, and a confident demeanor. Enthusiasm to work in a team environment should be exhibited in the interview as it is a much-needed quality to work in retail settings.

What do you say in a Costco interview?

Why did you want to work at Costco? Are you willing to perform jobs that require you to multitask? What days are you most available to work… How are you with teamwork?

“Tell us about yourself”, “why do you want to work for Costco?” and “how would you handle an angry customer” are some of the common Costco interview questions. Profile-based Costco interview questions can be more technical and relate to everyday duties that entail the position.

According to a survey run during the first quarter of 2022, 70 percent of adults in the United States have a positive opinion of Target, making it the most popular department store in this survey.

Keeping within these guidelines, Walmart continues to be the world's largest retailer, both domestically and internationally, with a significant commitment to a new online marketplace and fulfillment model.

Even billionaires like Mark Zuckerberg and Kylie Jenner have been seen at Costco. Here are 10 millionaires and billionaires that shop just like the everyday person.

Bananas are regularly Walmart's best-selling item.

Overall, the company sells over 1.5 billion pounds of bananas each year, making it one of the largest banana vendors in the world. Others among the company's top ten best selling include: Toilet Paper (330 million rolls each week) Slow Cookers.

If you're purchasing household essentials like eggs in bulk, then Costco is probably your better bet. The same generally holds true for bulk produce items, like fruits and vegetables, as well as meats and certain dairy products. But Walmart can be very competitive on things like toilet paper and paper towels.

Walmart is the largest retailer in the world

However, Walmart has consistently delivered an operating profit margin above Costco's and is doing so on a substantially more significant value of sales.

What is the number 1 grocery store in America?

Toilet Paper

But apparently buying TP in bulk is so common, it adds up to a significant amount of money for Costco. According to Reader's Digest, the company sells over a billion rolls per year and nets well over $400 million just on toilet paper alone.

The hardest to work in is definitely being a receiver. You not only have to be responsible for accountability of all merchandise coming into the building but also the integrity of the vendor upon accurate check ins.

That makes the retailer an ideal place to work for those who are looking for a full-time position. Walmart is a good place to work because it has a flexible scheduling system and offers consistent schedules. It also offers paid time off for its full-time employees.

Extra pay on Sundays

Costco operates on a time-and-a-half pay structure on Sundays. That means each hour an employee works they earn 50% more. No matter how many hours an employee works during the week, they earn more per hour when working on a Sunday.

To perform Costco cashier jobs successfully, employees should possess above-average communication skills and basic math knowledge. Costco cashiers and other store employees must also work in a busy and fast-paced environment with coworkers and customers of various backgrounds.

You don't pay attention to the price tags

If you buy food at Costco, you generally save because the chain doesn't mark up products as much as typical grocery stores, Demer says. “Costco prices average 10% less than the local big-box retailer,” she adds. But that doesn't mean everything is a good value.

Costco is known as a low-price leader, but as the big-box and warehouse store landscape becomes more and more competitive, it's getting harder to find unbeatable deals. Despite this, Costco still has some major purchasing power, which helps it keep costs way low.

“It really depends on what you're shopping for, but usually yes, it's a great idea to buy groceries and food at Costco,” said Julie Ramhold, consumer analyst at DealNews. “Mostly you'll want to focus on purchasing groceries that you use often as that'll be where you're most likely to see significant savings.

What is the product that Costco sells the most?

Toilet paper

Yes, that's right! Costco's best-selling item is its Kirkland Signature Bath Tissue. It sells more than a billion rolls every year, bringing in over $400 million dollars in revenue. Costco's toilet paper is thicker and more absorbent than most other brands.

If a Costco price tags ends in . 99, it's a full-price staple item (for now). If your favorite items end in . 99, you may not be saving money, but you can let out a sigh of relief that they'll most likely still be around the next time you shop.

Ultimately, if a single person can comfortably afford the $60 membership and has the room to store items purchased in bulk, then it makes sense for them to become a Costco member. Those short on spare storage shouldn't slink away from the store just yet, though.

Costco Wholesale

Despite what many retail “experts” say, your local Costco can also be a darn good place to negotiate the price.

If you have some heavy milk-drinkers in your house, Costco is the way to go. You'll have to buy two gallon-sized jugs, but you'll save about 28 cents a gallon.

Does Costco or Sam's Club Have Better Prices? Overall, the prices at Costco tend to be cheaper. However, Sam's Club has a greater selection of name-brand products and a cheaper membership fee.

Costco locations worldwide donate edible food to food banks and other nonprofits in their local communities. Donation programs vary by location and country.

The Markup on Clothing Is Capped at 15%

Costco is known for its low markups on products across the board. For Kirkland Signature items, the markup is capped at 15%. That means if the store's cost on a Kirkland Signature shirt is $10, it will be priced at no more than $11.50.