Grocery Optimization: Costco, Aldi, and Walmart

We’ve always been cost conscious with our grocery shopping.  We were heavy coupon clippers at first, likely a habit I learned from my grandmother and utilized when we were starting out and past broke.  We then consciously shopped the sales at the full price grocery stores and lived on a $300/mo grocery budget.   Once we both started working and moved to a bigger city, most of our shopping moved over to Costco.  It was the simple approach to not overpaying:  We were guaranteed to buy everything at 12-15% over cost, Costco took care of quality control, and we could offset part of our executive club membership through the rebate program.  The only issue with Costco was their long lines, which became more tolerable when we started investing in their stock in 2012.    The only item(s)we really had problem with the quantity of at Costco was fruit, just because two of us struggled to get through the quantities sold.

Now that we exited full time employment, we have more time to optimize our food expenses and Aldi & Walmart have become part of our regular rotation.  How do the prices/selection compare?  What can we/can’t we find or accept the quality at Aldi/Wal-Mart vs. others?  I’ve kept a Google Sheet tracking our most commonly purchased items and pricing information over the last six months and want to share the results:

Category 1:  Staples we’ve migrated to only purchasing at Aldi or Walmart:

Category 2:  Items of Indifference 

Category 3:  Items Still Purchased at Costco: 

The results after six months is roughly 1/3rd of our food spending now occurs at each store.   We’ve found ourselves going to the grocery store a bit more often since the quantities are smaller at Walmart & Aldi, then still opt for Costco on the items where we prefer the quality improvement more than the incrementally higher price.

What items do we struggle with finding from any of these three?

Fresh Fruit & Vegetables: Texas spoiled us, we had access to the local HEB Supermarket’s chain of Central Market stores. The produce was a notch above Whole Foods at regular grocery store prices. We have a local farmers market that is good when things are in season, plus we have access to a Trader Joes and Whole Foods.  Unfortunately the prices at Trader Joes or Whole Foods are significantly higher than we are used to.   Recently we broke down for a few items at Whole Foods that we couldn’t find elsewhere and the prices are just so high!

Bagels: Costco sells massive quantities of 2-3 types of bagels and I can’t get there on Aldi & Walmart’s quality. Right now the store of choice is a Trader Joe’s near our local Aldi’s.  Unfortunately the experience in our local Trader Joe’s is almost hellish. There is literally no parking at any time of the day and we can barely move inside the place.  I don’t get the cult following, but they need to open another location as soon as possible with the kind of foot traffic this location gets.

Frozen Pizza:  We’ve not been happy with the quality of the house brands at Aldi and can almost always beat Walmart prices from stalking sales and stocking up at a full price grocery store.  We also can’t seem to master making pizza at home for under $2.20/unit and don’t do pizza delivery (even though it’s now acceptable since we’re millionaires).

Takeaways After Six Months of Optimization

Value is a Combination of Price & Quality:  There is a general quality and price gap between Costco and Walmart/Aldi.   Where the price gap is fairly small but noticeable in quality, we opt for quality.   This is most noticeable for us in high protein items:  Beef, chicken, vegetarian protein, and gluten free pasta.  On the other side of the argument, there are items where Costco’s quality is better, but we just can’t get over the price gap.  40% more for mixed green salad or eggs is way far too much in exchange for a marginal increase in quality.  (What’s the deal with all the egg options anyways?).  We’ve found ourselves fine with trading down to Aldi/Walmart brands for any packaged goods creates a significant savings.

Increased Choice Migrated Some Items From Costco:  We’ve attempted to migrate our diet to a lower sugar diet thanks to a history of diabetes in our family.   For the longest time Costco didn’t sell unsweetened almond milk or the lower sugar versions of yogurt.  I also prefer 1% milk and peanut butter that Costco just doesn’t sell.   Costco likes to eliminate choice to provide value to its customers:  We enjoyed this as working professionals but have migrated to more choice now that we have more time.

Aldi & Walmart Quantities Can Be More Attractive:   Costco equals larger quantities.  Its been nice moving some of the items we’re indifferent on to a smaller quantity when possible.   I don’t need 4lbs of turkey bacon,  4lbs of cheese, or 40 tortillas when the prices are the same to buy in a smaller quantity.  Since we’re going to all three stores in most weeks, we have opted for the smaller quantities.

Using Our Amazon Cart:  Occasionally a non-perishable item we like will go on sale through Amazon.   We picked up our favorite Orgain Protein for 30% less than we could get anywhere else on the last Prime Day sale.  My only regret was not buying more than a four month supply.   We have a couple different items sitting in our shopping cart just in case there’s a price drop where it breaks through the price we could otherwise buy that item for at Costco or Walmart.

Pass On The Chain Grocery Stores:   I am now astonished at the prices when I go into one of the regular chain grocery stores.  We used to shop the weekly sale items from numerous stores, but even now the sale items are often overpriced.  I see people with baskets full of groceries at the full price stores and my mind screams financial destruction!   Do people just refuse to go into Aldi or Walmart?   Who voluntarily pays 30-40% more for the same product?

Wrapping Up

Tracking our grocery spending more carefully with the freedom and additional time early retirement has migrated some of our spending away from Costco.  Fully exploring Aldi has saved us money and we’ve had the pleasant surprise that our closest Walmart has comparable prices on many of the staples that Aldi carries.   We still love the experience of Costco, especially since we live near a newer (calm) store, but have found our spending at Costco drop overall with some of the limited choices and higher costs.

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