Trader Joes vs. Costco: What's a Better Place to Shop?

by Andrea Karim on 15 August 2012 25 comments

How does Trader Joe’s stack up against Costco? Both stores are often held up as ultimate destinations for the frugal shopper (frugal shoppers who also care about how employees are treated, as both Trader Joe’s and Costco seem to pay their employees well, unlike SOME big-box stores that will go unnamed in this article). Although I don't really enjoy grocery shopping anywhere, I know lots of people who swear by both chains as great shopping experiences. Friends of mine swoon when discussing Trader Joe's frozen desserts, and my mother waxes rhapsodic about Costco's USDA Prime filet mignon, which costs roughly half of what it would in a regular grocery store.

But is Trader Joe's really more convenient than Costco? Or is Costco a better place to shop than Trader Joe's? (See also: 5 Things Other Grocery Stores Should Steal From Trader Joe's)

Advantage: Trader Joe's

There are definitely some areas in which Trader Joe's beats Costco. Here are a few.

Variety of Flavors

Now, Costco probably has greater overall variety of food stuffs — like, you won't find 12 pounds of baby back ribs at Trader Joe's, but you sure as heck will at Costco. However, one of the things that makes Trader Joe's so attractive as a shopping destination is the variety of snack foods that they stock. Yes, you can buy almonds, walnuts, and pistachios by the gallon at Costco — but at Trader Joe's, you can buy wasabi, roasted, and raw almonds; Thai-chili-spiced cashews; pistachios both whole and shelled; Brazil nuts; filberts; walnuts; pumpkin kernels; sunflower seeds; and dozens of varieties of trail mix. Costco may have freeze-dried blueberries and dried apricots, but Trader Joe's has unsulphured dried mango, white peaches, apples, blueberries, apricots, and even freeze-dried pineapple.

Costco will always have seventeen-gallon jars of peanut butter, but Trader Joe's will have peanut, almond, walnut, and sesame butter as well.

Scale

No, you won’t find Memory Foam mattresses or flat screen televisions at Trader Joe’s, but you won’t have to walk six miles to get from the front door to the checkout counter, either.

In fact, Trader Joe's is sort of impressive in its ability to cram so many products into such small stores. They are masters of product stocking, and the overall size of the each store is surprisingly small (between 10,000 to 15,000 sq feet per store, as opposed to Costco's 143,000 sq foot average).

Now, how you feel about the size of a store may depend on how much you enjoy walking around the store. Me, I'd rather be in and out fairly quickly.

Specialty Produce

Most lists of "What to Buy (and Not) at Trader Joe's" will immediately call out Trader Joe's produce as a no-go. Fortunately, TJ's seems to have stopped selling individually shrink-wrapped tomatoes on a Styrofoam tray, but it still seems as though you’re better served purchasing fresh fruits and veggies elsewhere — fruit stands or farmer’s markets if your goal is freshness, Costco if you simply need massive quantities, and your favorite local grocer’s if you simply need more variety than Trader Joe’s offers.

That said, there are some exceptions in the fresh produce section at Trader Joe’s that always take me by surprise.

For instance, the only place that I have ever found Meyer lemons is at Trader Joe’s. I’m sure that they appear at higher-end food marts like Whole Foods every December, but they are prominently displayed at Trader Joe’s, and as such, that’s where I end up buying them.

This weekend, I was surprised to find an entire pound of green figs at Trader Joe’s for just $3.99. That’s steal compared to the $5 I paid for a few ounces of them at my local grocer a few days ago.

Fresh basil and rosemary plants, although often placed outside near the cut flowers, can be had at a relative steal at Trader Joe’s as well.

Trader Joe’s also seems to have a consistent special on bananas, offering them at roughly $0.19 per banana.

Reasonable Portions

How you feel about buying in bulk depends largely on your method of transportation and how much living space you have to keep stuff. Until recently, I lived in a townhouse in Seattle without much storage space, and every trip to Costco resulted in a nightmare unpacking scenario in which I had to figure out where to keep 600 rolls of toilet paper, two Tuscan cantaloupes, two loaves of bread, six cans of salmon, and a pot roast the size of a Volkswagen bus. Contrast that to a trip to Trader Joe's, where I would traipse home with one tightly packed paper grocery bag of nuts, dried fruit, crackers, frozen humbow, and other snacky things that fit neatly into my kitchen cupboards and freezer, and it was easy to love Trader Joe's.

No Membership Required

Trader Joe's just lets anyone saunter in. You don't have to pay a membership fee, show ID, or submit to a personal search on your way out. WIN.

Limited Overspending

When you buy stuff you didn't intend to buy at Trader Joe's, you might walk away having blown, at max, another $50 on wine and dark chocolate. When you buy things you didn't originally want (or need) at Costco, chances of getting away without spending an additional $300 are slim.

Advantage: Costco

Costco definitely shines as a place to find a huge variety of...everything, really. But here are a couple of areas in which Costco bests Trader Joe's.

Price Per Unit

Now, I am 100% certain that there are some products that are cheaper at Trader Joe's — I just wasn't able to locate any in my non-scientific survey. This list is by no means exhaustive, but when looking at generic (or at least, the cheapest) brands of food products at both stores, here are my cost per unit calculations.

Price comparison chart

Food Court

They say you should never shop hungry — well, at Costco, you can arrive hungry and actually sate your ravenous state before you get shopping. Although not exactly the pinnacle of healthy food, Costco hotdog stands offer tasty, filling food at incredibly cheap prices.

Samples

Sure, Trader Joe's offers a couple of coffee samplers in the back, and maybe some snack foods, but Costco has people throughout the store offering samples of everything from seafood to miso soup. Some people adore this — personally, I feel weird taking samples of food that I have no intention of purchasing, but I know people who can more or less make a free meal out of Costco samples.

Meat and Seafood

Trader Joe's definitely lacks a good butcher's section, and if you are a carnivore, this is where Costco may win you over. No, you probably won't find lots of organic or grass-fed beef at Costco, but you will find large quantities of meat in nearly every cut imaginable. Seafood can also be a real draw for Costco shoppers, although again, you might not find much in the way of sustainably harvested fish — more likely the fish and prawns are farmed, and Costco salmon almost always has color added.

Giant Portions

Costco was initially founded to serve businesses by providing goods at wholesale prices, and although it extended its membership rules to include households, it hasn’t exactly embraced the average urban consumer. Costco’s motto might as well be “Go big or go home.” Because while there are some things that can be purchased in smaller quantities, obviously the majority of Costco goods are sold in bulk — that’s where the savings are supposed to come from.

For some shoppers, buying two giant slabs of pork ribs is perfectly reasonable — for others, Costco shopping is pretty much precluded by a lack of storage space…or stomach space. Sure, two gallons of milk will work for the family with four kids, but if you’re only supplying the calcium needs of a childless couple, then Costco’s portions seem a bit excessive (unless you work out a sharing program with another person or household and simply halve the cost and the bounty).

If you hate shopping as much as I do, bulk buying can at least stretch your time in between tortuous shopping trips. The trick is being able to actually use everything that you buy in bulk — not just having the space to store it, but the capacity to consume perishable goods in a normal amount of time. If you have a big freezer and a decent sized pantry, Costco might seem like the ideal shopping experience.

Advantage: Draw

There are simply some advantages to both stores that really depend on where you live, how you travel, and your shopping philosophy.

Location, Location, Location

Trader Joe’s makes a point of having locations in both urban centers and suburban strip malls. In cities, they feature tiny, cramped parking lots that take hours to enter and exit. They are, however, usually on a major bus line, making it easy for many urban commuters to stop off and shop on their way home from work.

Costco, on the other hand, is not a walker’s destination. This is largely because it is difficult to leave Costco without at least 200 pounds of goods in your cart, and you can’t take a shopping cart on a bus (although you CAN simply walk away with the cart, as a good many urban shoppers are wont to do). No, Costco is a car-oriented shopping destination, replete with gas pumps and sometimes even drive-through car washes.

Mind you, even though I commute by car, this doesn’t make Costco an EASY place to shop. It’s just easier for me to get there than, say, someone who has chosen to embrace a car-free lifestyle.

Wine and Beer

Although this probably varies greatly from state to state, in my state of Washington, both Trader Joe's and Costco carry wine. Now, there's a lot of debate about whether Trader Joe's famous Two-Buck Chuck (Charles Shaw wines) is worth the $3 price tag. I'm a fairly discerning wine drinker, but I don't find Charles Shaw to be terribly off-putting. And anyway, you don't generally buy a $3 bottle of wine to impress people — you buy it for big BBQs or to make sangria.

I tried putting both Costco and Trader Joe's through a per-bottle cost comparison, but found it difficult to locate enough overlap in brands to make an accurate comparison, although both stores seem to pride themselves on a wide selection of wine. Costco certainly appeared to have an edge when it came to high-end wines and champagnes, but Trader Joe's had a wider variety of unusual European blends and hard ciders.

Sushi

Both Trader Joe's and Costco have the world's most horrific sushi platters. There is no excuse for this. It's practically a crime.

Do you prefer shopping at Trader Joe's or Costco? Maybe both? Neither? Tell us why in the comments!

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Guest's picture

In Colorado we (moment of silence, please) don't have Trader Joe's. Without question, that was the hardest adjustment we had to make coming from California, where Two Buck Chuck still is... two bucks.

It didn't take us long to buy a hard-sided file box with wheels, which is exactly the right size for a box of 2BC. Every time we had work in a TJ state, we'd check the box in empty and check it in full on the way back. One time in Seattle, as we were checking it in at the United counter, the lady looked at the odd shaped box and asked, suspiciously, "What's in there?"

Being the honest sort, we said it was a box of 2BC. "Oh no," she said, "We can't take that."

My wife gave her a puppy dog look and said, "We don't have Trader Joe's in Colorado. This is the only thing we can do!"

"Really??" the attendant said. "Well, in that case..." and off it went. The sympathy for our cause is universal.

So Costco wins for the moment, but only because TJ has been kept out of CO by the liquor store lobby.

In the meantime, we discovered Cost Plus is a good enough substitute. Until next year, when Trader Joe's makes its debut in Boulder.

Bring your cameras - it will be chaos! :)

Andrea Karim's picture

I think Seattle-ites consider it a sort of crime against humanity not to have a Trader Joe's within a two-mile radius of one's home. :)

There aren't any TJ's where my parents live, so when they visit me in the Seattle area, they usually buy several cases of Charles Shaw to take with them. You can tell that the employees believe us to be raging alcoholics.

Guest's picture
Max

I'm a Costco shopper myself. I own a house so I can buy a lot of non perishable good and skip a trip for next. Also i dont need to hunt for sales an coupons as most stuff are cheap enough. Makes it more convenient for me.

Guest's picture
Leslie

I'm a strict vegetarian (nearly vegan), and Trader Joe's is a godsend for me. They have cheese and other things I "can" eat and not everything is loaded with sugar like at the supermarket. I live kind of in between two TJ's and neither are particularly "convenient", so I go only about every 3-4 weeks and load up.

I don't have insurance so I do go to Costco to get my prescriptions filled (w/o a membership); they are the cheapest after much comparing. I can't understand paying money to save money (for groceries), and that wasn't figured into the chart in the post.

Costco and Sam's are madhouses, and just opportunities to spend money on unnecessary things. When I went to Costco last week to get a prescription, they had Dolce & Gabbana watches in the jewelry case when one first enters the warehouse. Seriously?? No one goes and gets just groceries, and that's warehouse stores' plan.

Andrea Karim's picture

Yeah, there's really no way to calculate how membership fees affect price per unit because different memberships have different costs, and obviously, the more you buy at membership clubs, the more value you get per unit.

Guest's picture
Cheap Char

Interesting article that brings up many good points on both sides except one Costco "con" theory that could be added. I have thought about this concept for some time...

My biggest issue with Costco/SamsClub etc. is the overall bulk buying mentality that I believe creates excess consumption and equal or even greater cost in the end which ultimately may negate any perceived savings from buying bulk. This is just a hunch I have developed but it's backed up by other web articles who share similar ideas on this subject. Try "Dark side of bulk buying" for example.

Open a huge box of Cheez-Its and what are you gonna do but eat a handful, and then some more, and then maybe just one more handful and... because it fosters a reduce sense of discipline on portion control given that the box seems SO "bottomless" and huge. Had it been a standard 13 oz. box of Cheez-Its the concept of portion is more obvious and the sense of leaving some for other people is more present. Excess supply possibly kicks in that primal survival mentality that informed our ancestors to eat well while the supply is good because they didn't know when the next meal might be. Obviously not an issue in the 21st century for most of us in the US, but a justifiable assertion that when there is a lot of something in our grasp we feel more comfortable taking more. So whatever the cost/serving saving there might have been could be lost when your eating portion has increased leaving you to run out possibly faster than had you just bought a smaller package on sale.

Another drawback to large packing is the thinking one better eat so much of one thing faster than normal as it may get stale or go bad too fast. Then there is the waste and throw away costs to factor in too if that happens. Again where's the saving? Ultimately bulk buying may encourage excess calorie consumption and could be a part of the obesity problem.

The psychology is complicated and it takes discipline. Think about it the next time you buy that big 'ol bulk bag of trail mix. One solution is to consider repackaging bulk items into smaller containers to reduce this effect especially if you are serving it to children. The concept of "enough" is important to have learned in those formative years.

FYI: I have the ability to shop at either but choose not to very often. Living in a house more than 3 times smaller than the national house size average is another major factor for us. The trade-off is that my utility bills are low! ;-)

I also find paying a membership fee to save money is somewhat absurd. Costco's "membership" gas price here in Prescott, AZ is seldom a penny or a few cents less than the bargain gas stations nearby. $60 a year is steep IMHO. Unless you have a family of 10 or run a restaurant or business, the savings at warehouse type stores seem modest at best. They have good brands at less price. Often a generic brand is satisfactorily cheaper though.

Cheers!

Guest's picture
PawPrint53

I'd love to be able to shop at Trader Joe's. Sadly, we don't have one.

Guest's picture
Evelyn

Trader Joe's in uptown Manhattan is a madhouse - poor store layout, and NO TWO BUCK CHUCK!! (Some NY law prohibits them from selling it). Also, they are frequently out of tofu, and don't carry a vegan veggie burger, so it's a pretty useless store for me. I do love going to Trader Joe's in MA where my mom lives - nice layout and they sell TWO BUCK CHUCK which is probably the best thing ever to happen to wine! (Jk, but it is still awesome!) Downtown, they have a separate wine store, but it's not a convenient location for me.

I am a single Manhattanite with a small kitchen who is bike commuter and Costco member (weird, right?) I can usually fit everything I need in my three bike baskets. I usually stop in once a week, sometimes twice. They have tofu at great prices, awesome vegan veggie burgers, and tons of other organic and vegan stuff like stiffed grape leaves. I do supplement my Costco shopping with trips to Whole Foods to pick up my "weird" stuff (vital wheat gluten flour, liquid stevia, etc.). I tend to eat the same thing for weeks at a time (always have), so Costco is a great solution for my mono-eating tendencies. Also, the membership fee is next to nothing when I figure out what I've saved (bought a color laser printer for about $180, a 32" flat screen for about $220). When calculating the membership cost (I pay $55 p/y), I figured I save that on seaweed snacks alone when compared to Trader Joe's prices ($0.67 for the same amount $0.99 would buy at TJ's).

Guest's picture
AGN

Costco vs TJ? How silly. That is like comparing JC Penney with Sports Authority for buying shoes.

And even if there were a TJ in Colorado, it wouldn't be allowed to sell Wine. That's the law there.

Andrea Karim's picture

Oh, excellent idea! I wonder if there is a Sports Authority in my area?

Guest's picture

I love Trader Joe's for grocery shopping. Not only do they have an amazingly eclectic variety of every different food item, they carry things that you could find at Whole Foods for incredibly low prices. I may reconsider my biased opinion once I have a family and need to stock up on endless amounts of toilet paper, but for me, TJ's wins over the massive zoo that is Costco.

Andrea Karim's picture

I dread going to Costco so much that I actually get in a bad mood a good three hours before I head there.

Guest's picture

I'm with you on this one! I love TJ's and go there every week to buy many of the products I can't get a the Farmer's Market.

Guest's picture
Ina Garten Davida

Both

It's not a choice...they serve two different purposes in my home

Guest's picture
krista

Agree completely. There are things that Costco sells that I can't find anywhere else and would HATE to give them up. Same for Trader Joe's. I am fortunate to have both within a few blocks of each other. I can hit them both in one trip. Unfortunately I have to buy produce elsewhere.

Big bonus for Costco is my Costco American Express. Rebates on all my purchases including 3% for gas (which I ALWAYS buy at Costco). Since I pay in full every month, the rebates more than pay for my membership.

Guest's picture

Unfortunately I have neither close to my home. I actually drive an hour to Trader Joe's.
I love that store and all they offer! Great comparison, thanks!

Guest's picture
Andrew

On our recent trip to the US my wife discovered Trader Joe's and fell in love with the place. She was shattered when she found out the chain isn't in Canada. Costo isn't even on her radar when it comes to groceries, they just don't have tasty, quality products in her opinion.

Guest's picture

You are comparing apples to oranges...

Andrea Karim's picture

Well, it IS an article about food shopping.

Guest's picture
Oscar R.

I shop at Costco and Trader's Joe. I pay Costco a membership fee of $55. Trader's Joe is open free to the public. Most of the time, I go to Trader's Joe for some cheaper and organic food. I go to Costco for its cheaper pizza and green/chicken salad.

Guest's picture
Guest Linda

I have shopped at Trader Joe's for thirty five years. Two original purposes of TJs was to provide quality products at prices teachers could afford and to provide organic, no preservatives, and otherwise healthy processed foods. Regarding produce you can easy see a good variety of organic at TJs, not so easy at Costco. Almost all TJs meat offerings are organic or without harmful additives. TJs is my grocery store because I can count their quality without reading all the labels. My kids are second generation TJs shoppers!

Guest's picture
lynn

I prefer Trader Joe's for the unique items and the organic soaps. I like their bread mixes, wines and treats too. They have some great cakes and cookies. My budget isn't blown every time I step into a TJ, like it is for Costco. It can be exhausting and time consuming shopping at Costco. I always feel happy and clean leaving a TJ's. I love the flowers too!

P.S. My favorite grocery store is Sprouts! Best fruits and veggies, breads, wines etc.

Guest's picture
Courtney

Thank you for this great breakdown.
I am from Arkansas and we didn't have Costco or Trader Joe's. Unfortunately Arkansas is the birthplace of one of those retailers that shall not be mentioned.

I'm a single person and I considered Costco for produce but I'm just not sure if it's all that practical for a single person to shop there. Maybe for a few things, but there's no need for me to buy everything in bulk.

Thank you again for this great breakdown.

Guest's picture

It all depends on what you are looking for and how you want to support business. Both are good to there employees and try to give customers good service and fair prices. I just wish there were more around then there are.

Guest's picture
Carolyn

Honestly, I would find your article much more useful if you had stayed away from the exaggerations you threw in there here and there. I was hoping for a more informative piece, I guess, instead of one with comedic flair. Kind of disappointed.