I've always been a pretty big fan of Costco. I enjoy the value that we get with our membership, but I am really starting to get annoyed by how organic foods at Costco are being forced upon us.
First, let me start off by saying that I have no problem with organic, but where I have the problem is that I like to have a choice on whether or not I purchase a product, and Costco is often taking ‘choice' out of the matter.
Adding Organic, Taking Away Non-Organic
See, what Costco has done over and over again is introduce an organic variety of product, but when doing so, they take away the non-organic option. Here are just a few examples that we've noticed recently:
- Sun Maid Raisins – We buy raisins in bulk as they're in high demand at our house. The kids love them in snacks, and I use them to make homemade, healthy ‘raisin bran'. They've switched from a non-organic type to organic on several occasions. At no point can you buy both.
- Canned mushrooms – We put canned mushrooms in a variety of meals, such as homemade pasta or spinach lasagna. Around a year ago, they removed the variety we've been purchasing for years, and replaced it with a 12-pack of organic variety.
- Extra virgin olive oil – They sold a big bottle of this and we always purchased it. Last time we went, the equivilent size is now organic. With this product, you can still buy a non-organic variety, but you have to buy two giant bottles instead, which is impractical for most households.
- Kirkland spaghetti sauce – We love buying their jarred sauce, except they recently changed over to organic sauce and the non-organic variety, you guessed it, is nowhere to be found.
- Pita chips – Looking for a nice little snack. Great! Look in the snack aisle and now they're organic….whether you want them or not!
- Croutons – Seriously, their croutons are now ‘organic' variety.
I'm sure that there are more, but these are only the ones that I can remember off the top of my head.
So why do I have a problem with this strategy. There are two things in play.
I Want Choice In Whether Or Not To Purchase Organic
First, I want to have a choice in whether we buy organic or not. I think there are some products that warrant consideration. Things like croutons and olive oil just don't fall in my spectrum on things that I feel will provide any health benefits. In fact, most of the items on the list just don't make sense to me.
Quite honestly, we look for organic options in more fresh items. Packaged items just don't interest us for the most part, yet that seems to hit every item on the list, and it's disappointing that there is not a choice when Costco decides to expand their offering.
It Seems Like A Money Grab
The second reason I have a problem is that it seems like it is a sneakly way for Costco to increase their profits. Costco generally has a very small mark-up on their products, I believe around 10%. So, a case of mushrooms sold at $8 might give them an $0.80 profit between what they purchased it for and what they sell it for, but a $12 case of organic mushrooms increases that profit to $1.20.
Hmmm, seems to make sense on why they don't give you a choice between the two. Which is great if you're Costco or a shareholder, but bad for someone who isn't interested in paying 50% more for the ‘same' product.
And, there's the rub. In the case of each and every item listed above, the price has increased significantly with the switch to organic variety.
The Case For Quitting Costco
Now, many might say, just shop elsewhere for those products. Which we do. We now buy canned mushrooms at Aldi. We look for croutons and pasta sauce on sale elsewhere. Pita chips are often on sale at the grocery store.
What this could ultimately mean is that Costco may not offer value. See, in order for Costco to add value, you have to save at least $55 to cover your annual membership fees. This is easy for us to do, but if they continue to strip away products that we then look elsewhere to buy, then we may find that the benefit is no longer in play.
Are we anywhere near the point where we'd consider quitting Costco? No. Our savings are still too robust. However, if that list above continues to grow, I would imagine that we might consider it. If they continue to turn into the Whole Foods of warehouse clubs, then they will price themselves away from our budget, and I expect many other families across America.
I know Costco is a very strong company, with many smart people having led them, and a very precise execution strategy. I just feel that this strategy could alienate many customers as it could be a very big drop in perceived value should this ‘replacement' continue.
Readers, what do you think about organic variety? Do you favor organic products or shy away from them? Have you noticed the gradual shift toward organic offerings at Costco, and does the lack of choice impact your shopping decisions?