Costco has ~3800 SKUs in-store. Walmart has 120,000 SKUs! [SKU is the bar code on the item for sale.]
Part of this is due to bulk packaging, but part is also due to intentionally limiting customer choice to the top 2 brands.
Think about facial tissues, i.e. Kleenex.
Pre-pandemic Costco offered 4 SKUs of tissue. You could buy Kirkland or Kleenex brand, and square or rectangular boxes. That's it. There are no lotion options, color options, extra vs single ply options, ultra-soft options, scent options, etc. [There are actually fewer tissue options post-pandemic.]
In brands alone, a grocery store probably carries Kleenex, Puffs, Scotties, NiceN'Soft, and the store brand! Multiply that by colors, 1 vs 2 vs 3 count packaging, and all the other options and you probably get 50 SKUs for facial tissue!
Not only is Costco's inventory logistics simpler and cheaper, it also eliminates "analysis paralysis". [The customer wants the best deal. When faced with lots of choices and uncertainty as to the best deal, the customer sometimes/often? decides to postpone the purchase.]
Costco has consistently low prices. Their overall profit margin is 2.5% [on everything, not just grocery items]!
Taking full advantage of Costco's low prices may require some changes in individual shopping.
But just because Costco has low prices doesn't automatically mean YOU individually save money.
1. Only buy what you can consume. Cheap prices don't matter if you end up throwing it away.
I buy paper towels, toilet paper, facial tissue at Costco. I do not buy cereal there because I can't finish their cereal size.
2. If you don't care about quality, I'm sure there are cheaper options than Costco.
3. If you are willing to spend the time to extensively comparison shop everything, you can probably save some money.
I don't want to do that. So I am ok buying from Costco at a relatively good price without any effort.
See BH thread "Re: New to Costco":
viewtopic.php?p=7602222#p7602222
Part of this is due to bulk packaging, but part is also due to intentionally limiting customer choice to the top 2 brands.
Think about facial tissues, i.e. Kleenex.
Pre-pandemic Costco offered 4 SKUs of tissue. You could buy Kirkland or Kleenex brand, and square or rectangular boxes. That's it. There are no lotion options, color options, extra vs single ply options, ultra-soft options, scent options, etc. [There are actually fewer tissue options post-pandemic.]
In brands alone, a grocery store probably carries Kleenex, Puffs, Scotties, NiceN'Soft, and the store brand! Multiply that by colors, 1 vs 2 vs 3 count packaging, and all the other options and you probably get 50 SKUs for facial tissue!
Not only is Costco's inventory logistics simpler and cheaper, it also eliminates "analysis paralysis". [The customer wants the best deal. When faced with lots of choices and uncertainty as to the best deal, the customer sometimes/often? decides to postpone the purchase.]
Costco has consistently low prices. Their overall profit margin is 2.5% [on everything, not just grocery items]!
Taking full advantage of Costco's low prices may require some changes in individual shopping.
But just because Costco has low prices doesn't automatically mean YOU individually save money.
1. Only buy what you can consume. Cheap prices don't matter if you end up throwing it away.
I buy paper towels, toilet paper, facial tissue at Costco. I do not buy cereal there because I can't finish their cereal size.
2. If you don't care about quality, I'm sure there are cheaper options than Costco.
3. If you are willing to spend the time to extensively comparison shop everything, you can probably save some money.
I don't want to do that. So I am ok buying from Costco at a relatively good price without any effort.
See BH thread "Re: New to Costco":
viewtopic.php?p=7602222#p7602222
Statistics: Posted by doobiedoo — Mon Jul 08, 2024 3:25 am — Replies 13 — Views 884