It’s no surprise that shopping at Whole Foods would be more expensive than going to Costco. After all, the former is referred to as "Whole Paycheck” for good reason, while Costco is known for its bargains on pretty much everything from food to electronics.
But the extent to which Whole Foods costs more is mind-blowing: According to a recent price check conducted by a financial services firm, the luxury health food store’s prices are more than 50 percent higher than those at members-only Costco.
J.P. Morgan conducted a nationwide price check comparing multiple items, such as perishable groceries, dry goods and other household items, at Costco, Whole Foods, Walmart, Target and Aldi. It found that Costco’s prices were the least expensive overall — and a whopping 58 percent lower than those at Whole Foods. Ouch!
“[Costco] offers an unquestioned value [proposition] with the best pricing, curated assortment, strong private label offering and treasure hunt atmosphere,” J.P. Morgan analyst Christopher Horvers wrote in a note to clients, according to CNBC.
But wait. The reason people go to Whole Foods in the first place is because, despite its high prices, the chain offers a tremendous range of healthy foods. Where else can you find 10 different varieties of quinoa, a delicious taco bar and about every organic product imaginable, all underneath one roof?
Well, here’s the kicker: Whole Foods actually isn’t the largest organic foods purveyor in the country — Costco is! The wholesaler reported $4 billion in organic foods sales in 2016, compared to Whole Food’s $3.6 billion. In addition to expanding its organic offerings in recent years, its prices are clearly more competitive. According to 2016 data, organic quinoa cost twice as much per pound at Whole Foods than Costco ($5.99 versus $2.87) while items like organic chicken breast and eggs were about $1 cheaper.
However, soon after Amazon purchased Whole Foods earlier this year for $13.7 billion, prices were cut up to 43 percent. For example, avocados dropped from $2.79 to $1.99 each, while a whole rotisserie chicken went from $13.99 to $9.99. Jeff Wilke, CEO of Amazon Worldwide Consumer, claimed that prices would decrease even more in the future, hinting at the creation of a customer-rewards program for Amazon Prime members at Whole Foods that will “continuously lower prices.”
Though J.P. Morgan’s price checks were done after the acquisition, it’s likely that Whole Foods prices will continue to drop. In the investor email Horvers explained that Whole Foods would need to narrow its pricing “substantially” to “be a threat” to Costco.
But before you break up with Whole Foods and splurge on a Costco membership (which starts at $60 per year), you also have to consider your needs. Since Costco is a wholesaler, most items must be purchased in bulk quantities. This is great if you are feeding a family of four or vigorously consuming mass quantities of certain items. But if not, it’s likely you will end up with a lot of food waste — which is no bueno for the environment.
Regardless of where you shop, here are the 20 best (and healthiest) foods in your grocery store.
What Do YOU Think?
Are you surprised that the prices at Whole Foods are more than double those at Costco? Where do you grocery shop? Will this new information change the way you buy groceries?