In the world of retail, both Aldi and Costco are known for their affordable groceries and household essentials. But while the two have very different business models, they have one thing in common — loyal customers.
There’s a reason Costco members are willing to pay $65 a year for a Gold Star membership or $130 a year for an Executive membership. For those who shop at Costco regularly, the annual fee is worth paying if it translates into ongoing savings year-round.
But there are certain advantages Aldi has over Costco, despite its popularity.
Where Aldi trumps Costco
- Aldi’s smaller products are better for budget-conscious consumers and small households.
- Aldi’s traditional supermarket model means there’s no membership fee to cover.
- Aldi’s “Twice as Nice Guarantee” offers money back on returns plus a replacement item.
Plus, some people simply find the idea of shopping at a store like Costco overwhelming. Consumers in that boat looking for a great deal may prefer to shop at Aldi for the streamlined experience.
Aldi could steal more customers away from Costco as high costs persist
Earlier this year, Aldi announced plans to open 225 new stores. As of mid-October, Aldi had 2,580 U.S. locations, according to ScrapeHero, compared to just 634 Costco locations.
But it’s not just that there are more Aldi locations than Costco. It’s that in today’s economic environment, consumers are finding themselves increasingly strapped for cash.
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At a time when inflation is still up 3% year over year, many people today can’t afford to take advantage of Costco’s great deals because they can’t front the money for a 30-pack of toilet paper when they only need a couple of rolls to get through the week. People who truly need to save money may be more inclined to take a chance on Aldi than load up on Costco’s bulk discounts.
Of course, one drawback of shopping at Aldi is it often means taking a chance on new brands. The Costco experience tends to be the opposite, as the store’s Kirkland Signature brand is often hailed as one of the most solid brands in all of retail.
But for people looking to save money, buying off-brands at Aldi might read like a no-brainer type of sacrifice.
Aldi’s Thanksgiving meal deal beats Costco’s by a mile
With the Thanksgiving holiday coming up, many people are no doubt looking to save money on their upcoming feast.
Both Costco and Aldi offer a Thanksgiving meal deal that makes hosting a snap. Only Aldi’s is a much budget-friendlier option.
Aldi’s $40 meal deal
Aldi is offering a $40 Thanksgiving meal for 10 that includes with the following products and ingredients:
- Turkey
- Rolls
- Cranberry sauce
- Mac and cheese
- Stuffing
- Pumpkin pie
“The ALDI commitment to low prices is unwavering and I am thrilled that we are able to offer an even more affordable holiday meal than last year,” saidCEO Atty McGrath in a press release. “Saving our shoppers money is our mission every day – but is especially important during the holidays when they need it most.”
Costco’s $200 meal deal
Costco’s meal deal is different from Aldi’s in that everything is pre-made. But at a price point of $200 for eight people, it’s hardly a budget-friendly option.
Costco’s Thanksgiving feast includes:
- Turkey
- Mashed potatoes
- Gravy
- Mac and cheese
- Corn
- Green bean casserole
- Cranberry relish
- Pumpkin pie
- Apple cobbler
The stark difference between the two deals highlights the distinct differences between Aldi customers and Costco customers.
At the end of the day, Costco is generally attracting higher-income customers than Aldi who can afford not only a membership fee and bulk purchases, but the occasional luxury, like a pre-cooked holiday meal.
But as inflation continues to batter consumers, there’s a good chance a growing number will say goodbye to Costco and start spending more of their money at Aldi instead.
Maurie Backman owns shares of Costco.
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