Walmart vs Costco in 2024: Which Retail Giant Wins on Price, Selection, and Overall Value? - 33rd Square (2024)

Wondering whether Walmart or Costco is the better place to spend your hard-earned dollars in 2024? As a bargain-hunting shopper myself, I’ve dug into the details to compare these retail titans across the factors that matter most: prices, product selection, membership perks, store experience and more.

By the end of this comprehensive 3,000+ word guide, you’ll know how to decide when to choose Walmart versus Costco based on your shopping habits, household needs and savings goals. Let’s dive in!

Comparing the Retail Giants: How Walmart and Costco Stack Up

First, a quick rundown on how Walmart and Costco became retail powerhouses:

• Walmart opened its first store in 1962 and has since grown to over 10,000 locations worldwide. This retail pioneer led the discount superstore revolution.
• Costco started in 1976 under the Price Club brand before rebranding to Costco Wholesale. With over 800 warehouse stores globally, Costco popularized the membership warehouse model.

While Walmart tops the Fortune 500 ranking, Costco placed #14 – an impressive feat with far fewer stores. But which retailer truly offers better value in 2024?

At a glance:

• Membership fee: Walmart – none; Costco – $60 to $120 annually
• Number of stores: Walmart – over 5,000 US; Costco – over 550 US
• Average store size: Walmart – 178,000 sq ft; Costco – 145,000 sq ft
• Product selection: Walmart – over 120,000 items; Costco – around 4,000 items
• Private brands: Walmart – Great Value, Equate, Parent’s Choice; Costco – Kirkland
• Starting hourly wages: Walmart – $12; Costco – $17
• Return policy: Walmart – 90 days; Costco – anytime

As you can see, while the retailers share some core features like wide aisles and low prices, the differences in membership fees, brand assortment, wages and return policies add up to divergent shopping experiences. Let’s explore how Walmart and Costco compare across the categories that matter most.

Prices and Value Comparison: Who Offers Better Deals?

For budget-savvy shoppers, price reigns supreme. You want to know you’re getting the best bang for your buck. So which retailer comes out ahead in the all-important value race?

Everyday Low Prices: Walmart Wins on National Brands

Plenty of analysis confirms Walmart beats Costco on everyday pricing for national brands across categories like food, household items, personal care, over-the-counter medications and more.

• An aggregated 2022 study of over 1,000 products found Walmart’s prices averaged 6% lower than Costco on a cost-per-unit basis.
• On a basket of 24 popular grocery items, Walmart’s total rang up 16% cheaper than the same items at Costco.
• Searches for the lowest prices on vitamins, pain relief medication, laundry detergent and other household staples consistently yield Walmart as the winner over Costco.

So if brand name matters more than bulk, Walmart is typically the cheaper option. The convenience of Walmart’s everywhere-low-prices model avoids the debate between big vs. small sizes.

Bulk Savings: Costco Beats Walmart on Unit Price

However, shopping by unit price tells a different story.

• Costco’s jumbo packages and bundles drive down the per-ounce or per-count costs for buyers willing to purchase more upfront.
• A 2018 price study found Costco’s giant toilet paper packs were half the per-sheet price of Walmart’s smaller packs.
• From nuts to soap, yogurt to trash bags, coffee to spinach, Costco consistently undercuts Walmart on cost-per-unit thanks to bulk sizes.

So if your household plows through plenty of everyday essentials, the bulk model at Costco can slash your total spending. Just be sure to assess realistic usage before those tempting deals lure you into overbuying.

Where Costco Crushes Walmart: Big Ticket Discounts

Beyond groceries and household supplies, Costco really shines in deep discounts on large purchases like appliances, electronics, furniture, tires, vacations, and more.

• A Samsung 65” Smart TV retails for $100 less at Costco than Walmart – a significant savings on a bigger ticket item.
• Costco trounces Walmart on tire pricing with per-tire installation packages as low as $15 (vs. $25 per tire at Walmart).
• Members save up to 30% on cruises and get additional perks like Costco Cash cards and onboard credits.
• “White tag” clearance deals on clothing, furniture, mattresses, jewelry and more offer short-term savings up to 60%.

So for big buys on luxury and durable items, Costco deals can stretch your money further. The key caveat is that warehouse inventory rotates, so bargains may not be available year-round.

Private Label Value: Kirkland vs. Great Value

Both retailers win on price with their respective private label brands – but which offers better quality?

• Kirkland Signature often matches or beats name brand quality thanks to products manufactured by major companies. It simply offers Kirkland packaging at 15-30% less.
• Walmart’s Great Value pantry staples and household items tend to be decent enough quality for the low prices. But some products fall short on performance compared to brands.

In a nutshell, Kirkland represents premium private label value while Great Value focuses only on price points. Kirkland may convince more brand loyalists to make the switch and save.

The Verdict: It Depends on Shopping Habits!

For shoppers wanting national brands and variety, Walmart wins for everyday low prices with no membership fee.

But households buying in bulk get far better unit value at Costco, which can outweigh the annual membership cost.

Ultimately shopping habits determine the better deal. Analyze your typical purchases and brand priorities to decide if Walmart or Costco offers more long-term savings.

Product Selection and Availability: Walmart’s Massive Assortment Beats Costco

Savvy shoppers don’t just hunt for bargains – you want access to the brands, categories and products you love most. Here’s how Walmart and Costco compare at stocking shelves.

With 120,000+ items at the average Supercenter, Walmart trounces Costco and its limited stock of around 4,000 SKUs per warehouse.

Walmart aims for one-stop shopping convenience across categories like:

• Extensive grocery – all the national brands plus wide produce, meat and bakery sections
• Huge apparel and accessories – clothes, shoes, jewelry for all styles and budgets
• Top beauty and personal care brands – high to low-end hair, makeup, skincare
• Deep home and furniture selections – patio, storage, decor, appliances big and small
• Large baby, kids and toy departments – all the trusted brands for babies to tweens
• Full sporting goods, automotive and seasonal sections – quality gear for life’s hobbies

Costco smartly focuses on volume sales in fewer categories like:

• Packaged grocery items only – note the limited meat and produce
• Basic apparel like t-shirts and underwear – very minimal seasonal clothing
• Limited electronics – TVs, laptops, tablets, smartphones, appliances
• Tires, batteries, home goods like towels and bedding
• High-end beauty, jewelry, and clothing brands – but unpredictable inventory
• Toys and books – but lesser known brands with limited selection

For shoppers who value versatility and options, Walmart is the clear product availability winner. Savvy planners can shop Costco for value bulk essentials paired with Walmart’s selection.

Walmart vs. Costco Membership Perks Compared

Here’s the reality – a Costco membership costs up to $120 annually per household. What do you get in return?

Basic Costco Membership Benefits

The starting Gold Star membership at $60 per year provides:

• Access to shop all Costco warehouse locations
• Low member-only pricing
• Additional discounts and coupons on select items
• Costco’s generous return policy
• Costco Concierge for discounts on hotels, cruises, guided vacation tours
• Lower insured rates through Costco Auto Insurance

Upgraded Executive Membership Extras

Upgrading to the Executive plan for $120 per year adds:

• 2% annual rewards up to $1,000 on Costco purchases – cash back sent via annual certificate
• Extra benefits including lower prices on check printing, identity protection plans, and life insurance
• Higher rewards caps on the Costco Anywhere Visa Card by Citi
• Preferred savings on Costco Travel vacations
• First dibs on warehouse coupons, savings events and Treasure Hunt deals

So while pricier, Executive Membership rewards can quickly offset the upgrade fee when you shop frequently at Costco.

In-Store Experience: Costco Leads in Service and Wait Times

Saving money is wonderful, but the shopping experience matters too. From staffing to store design, Costco edges out competitors.

Staffing and Service: Costco’s Employees Set the Bar

Walk into any Walmart or Costco, and the staffing and service gap becomes immediately apparent.

• Costco pays an average starting wage of $17/hour plus premium benefits that lead to incredibly low turnover under 6% per year. Workers stay and develop extensive experience.
• Walmart recently bumped its minimum to $12/hour, but turnover still exceeds 50% meaning short tenures for many workers.

The result? Costco employees are eager to help, answer questions, and happily handle returns or issues. Walmart associates often seem understaffed, undertrained, and less engaged. Studies show Walmart shoppers deal with more dismissive or unhelpful interactions versus the excellent service at Costco.

Store Design and Wait Times: Costco Manages Traffic Better

Costco warehouses also manage high customer traffic better through smart design innovations.

• Wider aisles with ample room for two-way foot and cart traffic prevents major clogs.
• Costco caps membership sign-ups based on warehouse capacity so stores don’t get overwhelmed.
• Self-checkout lanes move quick thanks to easy-to-scan barcoded items.

Conversely, Walmart penny-pinches on labor leading to bottlenecks:

• Narrower aisles often impede foot traffic and long lines.
• Understaffed registers lead to frustrating wait times exacerbated by untrained employees.
• Self-checkout kiosks have glitchy weight sensors, age checks and limited assistance.

So if your pet peeve is wasting time in line, Costco does more to minimize waits. Meandering the aisles is usually pleasantly de-crowded as well.

Financial Comparison: Walmart Rules on Revenue but Costco Delivers Greater Value

Massive scale has cemented Walmart’s position as the world’s largest retailer. But prudent Costco frequently bests Walmart in profitability metrics that reflect value.

Scale: Walmart Dominates on Revenue

Walmart’s dominance shows in its 2022 revenue of $573 billion globally, including:

• $102 billion from U.S. stores
• $34 billion from Walmart.com and other ecommerce

Meanwhile, Costco posted 2022 total revenue of $222 billion:

• $222 billion revenue from warehouse sales including ecommerce

Walmart is still the undisputed sales leader, outpacing Costco’s revenue 2-to-1. When it comes to sheer retail power and reach, Walmart has no U.S. peer – yet.

Efficiency: Costco Gets More Bang for the Buck

However, key financial ratios reveal Costco operates far more efficiently to create member value:

• Costco’s operating income is 3.3% of revenue versus Walmart’s 3.1%.
• Costco’s net income is 2.3% of revenue compared to Walmart’s 1.9%.
• Costco’s gross margin is 13.3% versus Walmart’s 24.6%, meaning Costco passes more savings to customers.

Costco also makes significantly more profit per location:

• The average Costco warehouse generated $164 million in 2022 U.S. sales.
• Walmart Supercenters averaged around $90 million per store.

So realistically, Costco offers greater value per square foot of retail space – an important assessment for investors as well.

Walmart vs. Costco for Investors: Stability vs. Growth

Both Walmart and Costco offer compelling cases for investors seeking retail leaders. Walmart provides stability and dividends, while Costco promises higher growth.

Walmart: Reliable Stock with Dividend Appeal

As an entrenched Dow component, Walmart stock offers investors:

• Stability and resiliency even in recessions thanks to its discount model and necessity-driven sales
• 47% 10-year stock growth and consistent price appreciation
• A dividend yield around 1.5% that has increased annually for 49 straight years

Walmart may not carry flashy growth stock appeal, but for dividend investors, the consistency and slow-but-steady stock gains make WMT shares a core long-term holding.

Costco: High-Growth Company Outperforming Competition

Costco has emerged as an investor favorite based on:

• Industry-leading same-store sales growth averaging high single digits, thanks to sticky memberships and renewal rates near 90%
• Aggressive expansion with 20-30 new warehouse openings per year
• Ecommerce sales growth that tripled competitors during the pandemic, now 12% of total revenue
• 120% 5-year stock gain as Wall Street cheered its resilient membership model

Younger investors planning long time horizons will likely favor Costco’s robust remaining growth prospects over slower-and-steady Walmart. Costco’s valuation reflects very high expectations, however.

The Ultimate Verdict: Walmart vs. Costco in 2024

After dissecting the retailers across all these factors, what’s the final call on Walmart vs. Costco?

For busy households wanting one-stop shopping convenience and broad product selections, Walmart remains a go-to retailer for affordable prices across categories.

But for larger families buying in bulk or any savvy shopper maximizing Costco’s perks, a paid membership can pay off exponentially, between the gas discounts, pharmacy savings, affordable travel, discounted gift cards, and more.

In reality, combining trips to both stores lets you unlock the specific advantages of each. Use Walmart for its assortment and get cost-per-unit savings on bulk essentials at Costco.

No matter your preferred retailer, keeping an eye out for the best deals will always maximize your household budget. Let the savings begin!

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