Costco vs. Amazon - Thoughts of Prime Members?

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kjvmartin
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Costco vs. Amazon - Thoughts of Prime Members?

Post by kjvmartin »

I've owned very few individual stocks, but I'm a strong Costco supporter and own a pittance of their stock. It's "fun money" as we might call it.

Costco has slipped from $180 to $159 since Amazon purchased Whole Foods. I can't see any correlation between Amazon owning a grocery store and how my shopping habits at Costco would change. I avail myself of several of their services, fill my cars with fuel, eat at the food court, and prefer many of their products (Kirkland brand) over options available anywhere else. They offer attractive pricing on fresh organic produce & meat and if something goes wrong they take it back no questions asked and no trouble to ship. I *love* that they pay a good wage & benefits. I use their Citi Visa for a great dal of my purchases.

I also like Amazon, but...

I think the two corporations couldn't be more different. Maybe I'm just too biased, so I'm looking for opinions on Costco. Is it really in trouble? I have to fight for parking, wait in line for gas, and wait in line to check out almost every time I visit any of the 3 in my area.

If you have Costco + Prime, what could Amazon do to draw you away from Costco?

kjvm
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unclescrooge
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by unclescrooge »

kjvmartin wrote:I've owned very few individual stocks, but I'm a strong Costco supporter and own a pittance of their stock. It's "fun money" as we might call it.

Costco has slipped from $180 to $159 since Amazon purchased Whole Foods. I can't see any correlation between Amazon owning a grocery store and how my shopping habits at Costco would change. I avail myself of several of their services, fill my cars with fuel, eat at the food court, and prefer many of their products (Kirkland brand) over options available anywhere else. They offer attractive pricing on fresh organic produce & meat and if something goes wrong they take it back no questions asked and no trouble to ship. I *love* that they pay a good wage & benefits. I use their Citi Visa for a great dal of my purchases.

I also like Amazon, but...

I think the two corporations couldn't be more different. Maybe I'm just too biased, so I'm looking for opinions on Costco. Is it really in trouble? I have to fight for parking, wait in line for gas, and wait in line to check out almost every time I visit any of the 3 in my area.

If you have Costco + Prime, what could Amazon do to draw you away from Costco?

kjvm
Send me free food samples on the weekend :mrgreen:

I haven't gotten around to buying my steaks online yet. So Costco is somewhat irreplaceable for now.
poker27
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by poker27 »

I have both. I'm a huge fan of Costco. I buy groceries, clothes, and going to the eye doctor there on Monday. I personally can't see getting food (hot or cold) delivered to me, but I also never thought I would get in the back of a strangers car and get driven places for cheaper then a cab.

While I enjoy going to Costco and see what new stuff they have, I also enjoy my free time. There lines are horrible.
TravelGeek
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by TravelGeek »

I shop at Amazon. My wife doesn't mind going to Costco. We benefit from both. We don't use Amazon to shop for groceries or other pantry items. I can't really see us order from Whole Foods online (and its at the end of town, so not really convenient for regular grocery trips); I would like to see the produce before spending my money on it.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by Tommy »

I like Costco but it is not a cheap place as it used to be. Each shopping in Costco it is about $200, and it is not that you bought a lot...In many cases I just don't need such a big package as they have. Shopping in Costco it's some kind of entertainment - you looking for parking, you trying samples, you staying in line..Many people, especially young one, buying online practically everything, and don't want weekly entertainment at Costco. They would prefer that once a week all groceries will be delivered to them and free weekend from grocery shopping. Also Amazon already has store where you check checkout without staying in line, if this come to Whole Food..Many people would go there just to save time.
That being said I don't see Amazon as direct competitor to Costco, at least not in foreseeable future.
jbranx
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by jbranx »

I do business with both firms. Costco once a month or so for big items like paper towel bundles that I feel kind of silly having shipped from AMZN. My confidence in AMZN doing food is that I can't recall ever getting a food shipment from them that didn't have bent cans, leaking plastic honey containers, missing food items, or something. To their credit, they always re-ship or else give me an extension on my Prime membership. At some point, and I see cases of it already, AMZN will raise shipping costs/its prices, and Costco will still be there with quality goods sold at near if not it's actual cost. Plus, the thing I like about Costco is that they seem to have happy employees. Avg. salary supposedly is $47K per year.
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Rob5TCP
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by Rob5TCP »

I use Amazon prime very frequently (both ordering and free videos)
but the dollar value of my Costco purchases far exceeds what I buy on Amazon.
Still the convenience of Amazon keeps me coming back.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by runner3081 »

Sam's Club > Amazon > Costco for me.

Our Sam's is always dead and have some nice deals most of the time. Costco, it is too busy and I have no interest in paying a membership fee to stand in line. We also don't require top brands, so that is where Sam's comes in and saves money.
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Portfolio7
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by Portfolio7 »

I prefer Target for groceries overall, it's the sweet spot for price and quality, excluding veggies. I do shop at both Costco, for certain specific items, and at Whole Foods, for other specific items.

I don't see them as direct competition for most of what I buy - Target is cheapest, the other two carry specialty items I like, and I'm not a fan of buying 3 months worth of food at a time. I do have a monthly shipment from Amazon that includes nuts I would otherwise buy at Target, and Tea I would otherwise buy at Whole Foods, but that's about it for groceries and for competition. The main loser in this competition is the local Safeway.

Maybe I'm not seeing the big deal, but I don't see this move by Amazon changing my shopping habbits.
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arsenalfan
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by arsenalfan »

Costco = $150-200 per week for us. 80% produce & meat, 20% staple groceries (beans/cereal/etc). Delivery from here would be GREAT and save me 90 min per week - there is a lot more homogeneity in Costco produce vs grocer, so doesn't have the "picker" problem other grocery stores have. Instacart delivers in my area - but the markup is 20-25% according to online reviews, so I don't do. I hate the crowds and lines as much as the next person.

WF = $100 per week for misc other groceries. Very curious about how Amazon Go will impact this space. Apple Pay shaves off 1-2 min, but the lines are average for my area grocery stores. Again Instacart delivers but at a markup as well.

I tried Amazon Pantry and the discount for having 5 items delivered monthly, etc...but found myself struggling to find 5 items I needed monthly (floss? Toothbrushes? Protein bars?). Can't bring myself to have the UPS guy deliver huge bins of TP and towels - seems wasteful to me.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by NOLA »

One of the reasons I like Costco is the wine selection. Great prices and a lot of different good wines. Plus my 1.5 year loves to sample food as well. Happy kid = happy dad
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by core4portfolio »

Iam a huge fan of costco.. they gave me free road side assistance through Ameriprise auto insurance
I buy milk, bread , vegetables , breakfast foods at costco every month.
Any item i purchase first check is at costco.. if not then i look on amazon.
I like their "in person" customer service and i felt i paid 90% of the time very fair price
lets see how Amazon / WFM overcome the advantages of costco
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Tracyfaa
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by Tracyfaa »

IMHO the short term market reaction is a knee jerk. Give it a few months to see what Amazon's real plan is. My wife and I won't be changing our Amazon buying or our trips to Costco. Or Sams Club for that matter!
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by SmileyFace »

I caught the 2006 movie "Idiocracy" last weekend whereby a couple of characters are frozen and emerge in the year 2505.
At one point they are in a Costco which seems to stretch on forever - and are headed for something like isle 5250 - about a "one-hour walk" they say.
I'd say this movie is as good of a stock-predictor for you as the responses from a handful of Bogleheads stating whether or not they will continue to shop there :)
Naismith
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by Naismith »

The nearest Costco is 2 hours away, so not really an option. The selection at Amazon makes our lives so much easier.

We just ordered our protective eyewear for the August eclipse, something that no store in our town is likely to carry.
badger42
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by badger42 »

As a long time Costco shopper (we buy bulk items, paper goods, coffee, cheese, etc every few weeks), I'm seeing a bit of rot around the edges.

- blade tenderizing basically all of the beef, even expensive / prime cuts (food safety nightmare, plus screws up the texture)
- some newer Kirkland products (e.g. gin) not up to par
- staff quality seems to be 'not what it was' - less fast / efficient, more obnoxious hard sells on things like membership upgrades
- warehouse doesn't seem as clean / organized

I can't tell you it this is "Amazon related" or just corporate lifecycle, but I would not be surprised if we were at "peak Costco"

Note: I don't own the stock, except for whatever shows up in my index funds
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by zhiwiller »

I let my CostCo membership lapse. I am a Prime member, but those two things aren't closely related.

[*] The warehouse shopping experience is horrible. If you want to get a particular thing, you have to fight the shoulder-to-shoulder swerving looky-loos that run into you and then give you the stinkeye.
[*] It's just me and my wife, so we rarely need the large amount of food. When you account for waste, CostCo is not as cheap as Publix.
[*] Quality hasn't been great lately.

When you amortize the $70 or whatever the memebrship is over the cost savings on goods, it wasn't worth it for me. I still use the pharmacy as you don't have to be a member.
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Meg77
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by Meg77 »

My husband and I had Amazon Prime and Costco memberships for a couple of years, but last year we let our Costco membership expire. The prices at Amazon are comparable for the stuff we are willing to buy in bulk (pet food, toilet paper), and it gets delivered to my door instead of me having to drive 20 minutes to Costco, struggle to park, and struggle to keep my temper in check as I struggle to navigate their giant carts around all the giant people obliviously clogging the aisles - and their screaming kids.

I do miss the food prices at Costco. I shop at Whole Foods for groceries and pay a lot more per ounce or pound, but I don't really spend that much more on groceries in total interestingly. At Costco if I wanted olive oil I might pay a lot less per ounce but be forced to buy a gallon or two at a time. That was OK for things like canned beans that won't go bad, but I don't have a huge family or a lot of storage space so I kind of resented having to get such giant containers and portions of everything at times. Even the fresh produce or sour cream - I'd buy it there because it was cheaper, but half of it would get thrown out because I couldn't use it fast enough. We ended up only going a few times a year because it took ages to run out of anything.

I think Costco is great a) if you live close to one and b) if you have a big family - and a big enough house to store a bunch of stuff. But for DINKs like me and my husband, or for single Millennials, or for anybody living in an urban setting without second freezers in the garage and second pantrys in the kitchen, Amazon will become more of a staple for cheap bulk items and possibly for things like prescription drugs and anything else they decide to sell and deliver that I otherwise have to make a special trip to go buy somewhere.

As far as groceries go though, I enjoy going to Whole Foods and wandering the aisles and selecting my own items. I can walk there, and it's more of an experience than an errand for me - and I think for lots of urban dwellers. I get a glass of wine and meander and sample gourmet cheeses and chocolates and whatever else they are giving away. I might buy a new vegetable I've never tried or meat from an animal I've never eaten.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by Just sayin... »

Re: Whole Foods. Relish the experience, because it will change, whether via Amazon or Wal-Mart's control: http://www.businessinsider.com/jpmorgan ... ods-2017-6
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Post by WhiteMaxima »

Amazon, please deliver 20 Gal of gas to my house because I hate to wait at Costco gas line.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by Jazztonight »

There are Costco and Amazon, the companies from which you buy products and services. Then there are Costco and Amazon, the stocks.

As I write this my DW is shopping at Costco. I love Costco. We buy our gas there, and I use CostcoTravel to rent cars--I love their site.

Then we buy things through Amazon Prime, watch movies and TV shows, and I've used PrimePantry to order stuff for my Dad when he needed help.

Since you're probably not going to sell your Costco stock, why not just wait and see what happens? As you say, it's a good company with a strong presence.

btw, our Costco recently added a bunch of gas pumps and now the wait is less.
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kjvmartin
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by kjvmartin »

Jazztonight wrote:There are Costco and Amazon, the companies from which you buy products and services. Then there are Costco and Amazon, the stocks.

As I write this my DW is shopping at Costco. I love Costco. We buy our gas there, and I use CostcoTravel to rent cars--I love their site.

Then we buy things through Amazon Prime, watch movies and TV shows, and I've used PrimePantry to order stuff for my Dad when he needed help.

Since you're probably not going to sell your Costco stock, why not just wait and see what happens? As you say, it's a good company with a strong presence.

btw, our Costco recently added a bunch of gas pumps and now the wait is less.
Indeed no plans to sell anytime soon. In fact, I've bought a little more. Amazon would replace the stuff I buy from Meijer and/or Kroger by getting it delivered to me for the same cost as I could buy it in store. Amazon would never replace my Costco uses and I thought I might be a bit unusual, but I think judging by these responses that I'm not that unusual.
WhiteMaxima
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by WhiteMaxima »

grocery shopping Amazon online and deliver to door or paying expensive food at wholefood? they are not vitamin pill and pet food. My favorite grocery is from farmer's market and local meat shop. Not even Kroger and Costco.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by Munir »

I am a Prime member. I like and use both Costco and Amazon- and Trader Joe's. No opinion on their stocks.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by iamlucky13 »

If it were solely up to me, we'd let both lapse, but the wife has so far insisted on keeping them.

The savings at Costco tend to get overstated, at least compared to sale prices elsewhere, they're hard to get into and out of, and the behavior of the crowds really just makes it an unpleasant experience. I generally let my wife handle that trip on her own, which she is at least able to do at non-peak times.

I think even she is now ok with letting Prime lapse, because she's getting fed up with the shipping lies. Since the main reason we were paying for it was the included faster shipping, that ruins the value. The free month extension they offer if you call to complain doesn't undo the trouble caused by items you made plans on having by a certain date arrive late. If we need something quickly, we'll just buy it locally, or pay the one-time expedited shipping price.

There's quite a few lesser problems I've had with Amazon that are continuously eroding my interest in shopping with them, but I don't want to just turn this into a long rant.

Also, in general, I prefer to spread my shopping dollars around when it's not onerous to do so, in order to help ensure the survival of robust competition.

I'm not sure if any of this helps you get an impression of the overall market perception of the companies to value their stocks, but I guess if anything my input is one of several million customers slightly more inclined towards Costco than Amazon, with no inherent loyalty towards either.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by TravelforFun »

I bought Costco stock after a Costco store opened in my city a few years ago and the stock has been doing very well until recently. I also own Amazon stock and will hang on to both for a while. I really hope Amazon will find ways to make grocery delivery works.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by MnD »

For probably 15 years we have been steadily migrating our dollars to Costco _AND_ Amazon.
I've yet to see much competition between them.
They are two distinct models that are killing a fair share of conventional and mostly worn-out retail.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by Ragnoth »

I live in a very HCOL area without a car, and basically have bulk goods (paper products, detergents, etc.) shipped to my doorstep from Amazon. I maintain a Costco membership, but actually getting out to the store and stocking up can be quite the production.

The calculus is different if you are in the burbs and near a Costco... but Amazon can be incredibly convenient regardless, and the cost difference is pretty minimal in my experience.

That said, I've always been a bit squeamish about produce/meat delivery, and I don't really see the WF acquisition impacting Costco's market position.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by Nova1967 »

Amazon is good for some things like used books but it appears that some people just have a fascination with receiving packages in the mail vs the cost efficiency of a warehouse store. I can't see ordering fresh fish, apples, bottled water, toilet paper etc.
The line is just as long for the purchase of 30 items as it is for 5 items.
I don't go to Costco because it's too far but there is a BJs Wholesale near where I live and if avoided on weekends its generally not too crowded
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by hoops777 »

One day people will be happy.All stores will be gone and all office workplaces closed.People will be able to work from home and never have to venture out into the world for anything,sitting at their computers all day,ordering everything they need online.The more health conscious will at least have a treadmill,that they of course had delivered from Amazon or Costco which also has a good online business. :D

Seriously,both Amazon and Costco are great and because they are great,they have a very large loyal following that are not going anywhere.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by multiham »

I work in sales for a major Health & Beauty consumer company. Let me tell you that all the retailers are scared right now. Trips to stores are going down at rates never seen before. Everyone is having to figure out how to maintain/grow loyalty with their existing shoppers. All stores are trying to figure out the click and collect model (order on-line and pick up at curbside at the store). Grocery stores were making out okay as no online retailer has figured out a great model yet. However, just look at Kroger. They had 52 straight quarters of growth which came to an end during their 4th qtr of 2016.

You don't want to look at this as a typical purchase of a bunch of stores. Amazon is getting store fronts which they can use to be mini warehouses for shipments or something much bigger. What they were lacking in category management of food, they just bought. They are constantly asking suppliers for the same cost per ounce/cost per each as what club gets. For instance, if a supplier normally sells a 10 oz jar of peanut butter to Kroger for $1, thats $.10 per ounce. The same supplier may sell a triple pack of the same peanut butter to Costco for $2.40 or $.08 per ounce. If they can get the suppliers to provide this equivalent cost, what advantage does a club store have over Amazon? I would argue that it is only the experience and extra services such as gas, vacation clubs, etc. Please do not think about this from the vantage point of a retired person who has the time and freedom to shop. If you are a 35 year old parent working full time with 3 kids who are in all kinds of activities, where are you going to purchase? If Amazon delivers it to you same day, at the same cost of going in-store, why would you continue to go to the store? If its easier for you to take 20 minutes over lunch and go on-line, place an order, and pick-up at the local store when you want, why spend all the time in the store? If they can find a way to give you the vegetables/fruits you like, why would you go in-store? For instance, I like organic grapes which are very firm. If they find a way to allow me to share my preferences and deliver on them at the same cost, why would you not take advantage?

It wasn't that many years ago that people believed Kmart, Sears, and Radio Shack were stores that would always be there. Costco management is very smart, but they will need to change their business model, experience (long lines, have to find boxes to pack groceries in, don't take most credit cards), to stay competitive if Amazon takes price and size out of the model.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by Pajamas »

multiham, I have read a TON of analysis of the Amazon buyout of Whole Foods over the last week and your succinct take on it is one of the best.

kjvmartin, if you are happy with Costco and don't need Amazon, stick with it. Right now fresh grocery delivery is an extra charge from Amazon and you don't get to pick out your own meat and produce. If you don't need or want the other Amazon Prime services, and want gas and other services that Costco provides, that's great.

https://www.amazon.com/gp/help/customer ... =200444160

If you are still having trouble deciding, maybe this will help:

https://www.google.com/search?q=easy+co ... ipes+ideas
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kjvmartin
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by kjvmartin »

multiham wrote: If its easier for you to take 20 minutes over lunch and go on-line, place an order, and pick-up at the local store when you want, why spend all the time in the store? If they can find a way to give you the vegetables/fruits you like, why would you go in-store? For instance, I like organic grapes which are very firm. If they find a way to allow me to share my preferences and deliver on them at the same cost, why would you not take advantage?
Maybe this is different based on locality. My local Kroger, Wal-Mart, and Meijer both offer me to order my groceries online and pick them up curbside. Amazon is going to get me wholesale club prices at retail?
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by Dottie57 »

I am not a big amazon shopper. I buy items on Amazon because I can't find them in my local stores. Just bought mentadent toothpaste in a pump because my mom has arthritic hands and cannot use toothpaste in tubes.

I am also not thrilled with stories which have come out about the way Amazon treats their warehouse workers. I like to use businesses who treat employees well.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by hoops777 »

Is Amazon going to give me my free samples and the Costco snack bar :)
Going to Costco is just different than other stores.Some people hate it but I think their success speaks for itself.Costco is very,very,very far removed from Sears RadioShack or Kmart.Did I say very,very,very far because I meant very very very very very very far :mrgreen:
Costco also sells online and has great deals with free delivery on quite a few things.
As much as they want to,Amazon is not taking over the world.
And...as much as people with zero patience want to complain in our instant gratification society,the lines at Costco move very fast.
Amazon serves a purpose and Costco serves a purpose.
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danaht
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by danaht »

Costco is great. But I don't enjoy waiting in lines - and every time I go to Costco I have to wait in a long line. Costco refuses to invest in technology that could speed this up - like self check-out lines. It also does not offer things that could improve the customer experience like in-store WIFI. So, I am making more trips to Sam's Club and less trips to Costco recently - because Sam's Club offers both of these and is continuously improving the customer experience. I still like Costco - but I find Sam's Club more convenient lately. Costco will be OK as long as they improve the customer experience. If they don't evolve and do this - they are in serious trouble. Because, I believe Amazon will bring the best possible shopping experience to Whole Foods. People will want to shop at Whole Foods - because it will be rewarding, fun, and most of all convenient and quick!
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by Case59 »

In terms of shopping, my wife and I mainly use Costco for nuts, ribs (love their ribs), roast chicken, booze, and wine. We think they do a great job. Btw, Warren Buffet considers Costco one of the best run companies in America. These are the guys who backed down Coke over a price increase.

I also use Amazon Prime, and am a big fan of all things Amazon. I've told family members at Christmastime that, generally speaking, if Amazon doesn't sell it, you aren't getting it.

In terms of stock evaluation, I think Costco knows exactly what it's doing and is doing it very well. It also has lots of room for growth. I think Amazon is experimenting with excess cash. Keep in mind this is a company that took many years to turn a profit, and still isn't all that profitable.

If I were still buying individual stocks, I would buy Costco after the recent panic downturn. But there is a reason I am almost solely index funds now--nobody (especially me) ever got rich taking my stock advice.
Last edited by Case59 on Sat Jun 24, 2017 9:53 pm, edited 2 times in total.
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by hoops777 »

I really do not get it.The lines at Costco move very fast considering how much stuff people buy.Now if you are there on a Sunday afternoon and it is super crowded there is nothing they or anyone else can really do beyond having 50 checkouts.Costco use to have self checkout and they dropped it because it was not efficient.Self checkout is a pain.There is always someone who needs help and I do not see how it is a benefit unless it is for a few items.Do you think people at Costco buying 20 or more items are going to go through a self checkout faster than with a cashier?No way.
People really need to chill out and slow down a bit.
K.I.S.S........so easy to say so difficult to do.
danaht
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by danaht »

hoops777 wrote:I really do not get it.The lines at Costco move very fast considering how much stuff people buy.Now if you are there on a Sunday afternoon and it is super crowded there is nothing they or anyone else can really do beyond having 50 checkouts.Costco use to have self checkout and they dropped it because it was not efficient.Self checkout is a pain.There is always someone who needs help and I do not see how it is a benefit unless it is for a few items.Do you think people at Costco buying 20 or more items are going to go through a self checkout faster than with a cashier?No way.
People really need to chill out and slow down a bit.
Walmart is also super busy - but I never have to wait too long at Walmart because they usually have more than enough self check-out lines open. Some Walmart locations and all of Sam's Club locations are also allowing people to skip the check-out process all together - by allowing people to use their own phone to scan items and check-out. Instead of giving up on the technology - I would have preferred Costco fix their issues implementing it. Have cashiers available for people who like to use them. But - also have self checkout lines (or a phone app) that are available for the customer's convenience.
hoops777
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by hoops777 »

I am in the minority but I believe the world would be a better place if cell phones were never invented.If I only had a even a penny for every person I see daily looking down at their phones,addicted to their phones.I do not need to pay for my groceries with my phone.Sorry for going off topic but it drives me nuts.I swear people get a rush when they get a text.
K.I.S.S........so easy to say so difficult to do.
aqan
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by aqan »

kjvmartin wrote: Costco has slipped from $180 to $159 since Amazon purchased Whole Foods. I can't see any correlation between Amazon owning a grocery store and how my shopping habits at Costco would change.
kjvm
exactly my thoughts.
no one really knows what amazon plans to do with whole foods. Some say it will be a combination of grocery and chic book store where you can lounge around and drink coffee and read books:).
I'd imagine it will take away more business from target/walmart/stop & shop/shoprite/BN/starbucks and no so much from Costco.
Costco offers quality products without the gimmick of coupons, I would expect amazon to offer low cost (and low quality) products to win the customers, so shouldn't be too much of overlap.

That said, Walmart has greatly upped their game in online sales and the stores i visited over the past few months had noticeable changes in the in-store service. not sure how quickly can Costco turn around and be ready to compete with higher level of service like buy online and pickup in-store or a shiny new app. IMO technology can be one thing that Costco will have trouble competing in... and maybe thats what is pushing the stock down so much??? what do you guys think?
Need to read more to get clarity on this.
corgimom11
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by corgimom11 »

For me, the one thing that really differentiates Costco from Prime for me is the limited selection. That may be a con for some people, but for me - the more choices you give me, the more research I'm going to do, the longer it takes me to buy anything and I've spent even much more of my time trying to figure it out. There's really something to be said on how Costco vets all of the various product throughout their store, and I can count on one hand how many things I've bought at Costco over the years that I regret. In those cases, I have easily returned it, no questions asked. Prime the quality has been hit or miss, usually a miss primarily when it's not direct through Amazon and it's through some 3rd party vendor. One example, I bought one TV from Costco and one from Amazon. The latter experience was miserable with the delivery.

I spend a lot of money at Costco and I don't see that changing. If anything, we may shop there even a bit more as my work is moving within 1-2 minute drive from the Costco closest to our home. I buy pretty much everything there except a) work clothes b) produce - the portions are just way too large.

Amazon Prime Fresh delivers in my area too. I've considered trying it, especially around the holidays/year-end when I have way too much other things going on, but I looked at their meat/seafood prices and they are not competitive at all. 1 lb of 93% lean ground beef for $9.99. Why would I do that when I can walk into Costco and get it for $2.99 per pound?

But, Costco sometimes has the value prop issue with meat for me too. Mostly because I am a pretty bargain shopper. I go into our local grocery store on Friday mornings when I need to fill our freezer and usually can get a host of whole chickens, marked down steaks/roasts, ground beef, etc. for usually 50% off. We immediately portion it to common meal sizes with our food saver, and put it all in the freezer. Probably doesn't work for everyone, but my husband and I both love to cook and we very rarely eat out (outside of vacations, we maybe eat out 3 to 5 times a year). This method has saved us into the thousands of dollars per year for an activity that only takes us a couple of hours a month (store time included).
finite_difference
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by finite_difference »

In the old days, a milkman would drop off fresh milk at your house. Then the milkman disappeared and everyone had to buy milk at the grocery store. In the near future we will be able to have all our groceries dropped off at our house. We've come full circle.
Last edited by finite_difference on Sun Jun 25, 2017 12:25 pm, edited 2 times in total.
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multiham
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by multiham »

kjvmartin wrote:
multiham wrote: If its easier for you to take 20 minutes over lunch and go on-line, place an order, and pick-up at the local store when you want, why spend all the time in the store? If they can find a way to give you the vegetables/fruits you like, why would you go in-store? For instance, I like organic grapes which are very firm. If they find a way to allow me to share my preferences and deliver on them at the same cost, why would you not take advantage?
Maybe this is different based on locality. My local Kroger, Wal-Mart, and Meijer both offer me to order my groceries online and pick them up curbside. Amazon is going to get me wholesale club prices at retail?
Agree on the customers you are pointing out. They are progressive and are delivering on the experience but at what cost to you? I believe its $4.95 per order at Kroger and Meijer charges are different depending where you live. Lets say that Amazon offers to include this cost as part of Amazon Prime or develops a new class of service.

No such thing as wholesale pricing. Every company that I know of in my industry (Health & Beauty Aids) that wants to do business with clubs designs a specific club pack to sell to Costco, Sam's and BJ's. These clubs take lower margins than typical Grocery, Drug, or Mass retailers.

Yes, Amazon and many other large retailers are trying to negotiate with suppliers to offer the same price per ounce/each. If they are successful, and they are trying hard, why would you shop at Costco? Not saying you wouldn't keep them if you value the other services they provide. If I can buy one 32 oz jar of mayonnaise for the same price per ounce as a 3 pack at Costco, why would the majority of people buy 3?
Traveler
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by Traveler »

About the same time as AMZN's WFM acquisition announcement was an announcement that Aldi plans to make a major expansion in the US. That could be playing a role in COST's stock price decline. The grocery stores have been hit hard the last couple weeks. WFM gives AMZN about 450 warehouses of food from which to deliver and/or offer pickup locations for AMZN lockers in mostly urban, high income areas which correlates to AMZN Prime membership. I do wonder how many Prime members actually shop at WFM - to me it is an overpriced grocery store that I only go to when I can't find a unique item somewhere else. WFM's net margins are in the 3-3.5% range which, while higher than AMZN's retail margins (which are negative) and higher than most other grocery chains, still don't allow for much discounting. Time will tell on what AMZN actually does with WFM and how it impacts AMZN's financial performance and other retailers.
hoops777
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by hoops777 »

I always looked at Whole Foods as an overpriced grocery store as well with a very specific customer base.Not a fan of spending $70 instead of $50.There is a reason their sales have been declining.The availability of organic produce everywhere and other "healthy" foods at better prices is not a great thing for Whole Foods.
K.I.S.S........so easy to say so difficult to do.
afan
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by afan »

Convenience counts for a lot. There is no Costco near enough to us to make it worth considering. There is a Walmart that is also too far away for any regular use. I have gone there on occasion to see whether it is worth it. The prices certainly are good, but not by enough to make a trip more than a few times a year= never. My utilization of the Costco would never justify paying a fee to belong. Same for Sam's Club.

The big appeal of Amazon and Google Express is the ability to order from the comfort of my home, when I have time, and be done. Sometime thereafter the items appear at our door. Going to a discount store cannot compete with that.

We use Whole Foods for fresh food because it is convenient. By knowing what to buy there and what not to we don't find the prices to be problematic. Their prices for milk and OJ are the same as our regular supermarket. They probably have some expensive things as well, but I would not be buying them anywhere.
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kjvmartin
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by kjvmartin »

afan wrote:Convenience counts for a lot. There is no Costco near enough to us to make it worth considering.
This is part of why I think Costco has such potential. There are people clamoring to have them built all over the country. I think there's room for a lot of growth.
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SmileyFace
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by SmileyFace »

kjvmartin wrote: This is part of why I think Costco has such potential. There are people clamoring to have them built all over the country. I think there's room for a lot of growth.
That's funny - I remember folks saying this about Sears - now look what's become of them.
"Quality clothes, appliance, etc. all at a great prices - a big loyal following of Craftsman tools buyers - loyal Kenmore appliacne buyers, etc....."

Not sure if the folks that thought Sears would grow and grow and that other retailers wouldn't come along and make them obsolete sold their stock in time. Then there was Circuit City - pioneering the Electronics Superstore format. I wonder if folks that thought they had figured out how to dominate a market that would grow and prosper knew when to get out. Then there were the Computer superstores (CompUSA, Computer City). The list goes on and on. Best of luck - the signs of when any individual stock has reached its peak is known to no-one.
hoops777
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Re: Costco vs. Amazon - Thoughts of Prime Members?

Post by hoops777 »

In November they had a proposition on the local ballot to allow Costco to open another store in a certain area.There are already 2 Costco's about 7 miles or so in opposite directions in adjoining cities.It was a war but Costco won.The oppossition was concerned it would harm the small town feel and create too much traffic.It was proposed in a shopping/commercial area next to the freeway so the argument was a bit weak.It was interesting to see the reactions.
Also...Costco is not anything like Sears other than the fact that they sell things.
K.I.S.S........so easy to say so difficult to do.
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