Is Aldi Cheaper Than Costco?

Which is your best bet to save on groceries?

Food prices have been skyrocketing due to inflation, forcing many to look for ways to save money on groceries. To decide between shopping at Aldi or Costco, you are probably wondering which one is the most cost-effective for your budget. It can be difficult to compare prices between the two stores since they each offer a wide variety of products and services. To help, let's take a look at how the prices at Aldi and Costco compare for some of the most commonly purchased items.

What is Aldi?

Aldi is a Germany-based discount retailer with close to 2,000 store locations in 36 states. Last year, it was the fastest-growing grocery chain in the U.S. and it is now the third-largest grocery retailer by store count. Walmart and Kroger hold the number one and number two spots respectively. In terms of sales, Aldi is ranked 16th, according to the National Retail Federation. More than 90% of the grocery products Aldi sells are Aldi-exclusive products. According to Aldi, offering its own private label brand allows it to offer lower prices. This way, Aldi doesn't pass on the hidden costs of the large national brands, such as marketing and advertising, to its customers.

What is Costco?

In comparison, Costco has 584 locations in 46 states and Puerto Rico. Although Costco is a quarter the size of Aldi in terms of locations, Costco's U.S. retail sales in 2021 were nearly four times greater than Aldi's. Costco also has its own private label brand, Kirkland Signature, which makes up 30% of Costco's overall sales. Unlike Aldi, Costco requires a membership to shop at its stores, charging $60 a year for the Gold Star membership and $120 for its Executive membership. So customers will need to take the fee into account when comparing prices. Aldi doesn't offer rewards, however, nor does it offer a credit card like the Costco Anywhere Visa® Card by Citi.

Aldi's sales grow double digits

The high price of groceries has pushed more Americans to shop at discount stores such as Dollar General and Aldi. As reported by Reuters, Scott Patton, Aldi's Vice President of National Buying, states that the store's double-digit growth over the past year was driven by 1 million new customers. Most of Aldi's locations are in metropolitan areas. Shoppers are opting to save on gas and shop at Aldi rather than drive to a Walmart or Costco, usually located outside of major urban areas.

Aldi has attributed some of its growth to offering more fresh produce, which now makes up two-thirds of sales. Patton states that Aldi is able to price fruits and vegetables at a 20%-40% discount versus competitors by cutting out excess labor, refreshing produce seasonally, and offering only 120 types of products on average. In comparison, a Costco location has 4,000 products, the average supermarket has 30,000 products, and a Walmart Supercenter sells close to 120,000 different products.

If you live in a metropolitan area with an Aldi location, enjoy Aldi's private label brands, and don't need a large number of different products, then Aldi may be a good grocery store choice for you. Customers can find the majority of their average weekly shopping list at Aldi, including fresh meats, fruits, vegetables, and bakery items. Here are some price comparisons for popular food items. These are online prices and based on similar products. Keep in mind that prices will vary based on availability, location, shipping cost, and taxes.

Produce

Bananas

Aldi: $0.59 per pound

Costco: $0.66 per pound

Blueberries

Aldi: $0.19 per ounce

Costco: $0.39 per ounce

Organic spinach

Aldi: $0.64 per ounce

Costco: $0.87 per ounce

Meat

USDA Choice Black Angus strip steak

Aldi: $12.49 per pound

Costco: $28 per pound

Boneless skinless chicken breasts

Aldi: $3.29 per pound (fresh)

Costco: $3.38 per pound (frozen)

Chicken thighs and drumsticks

Aldi: $2.39 per pound (thighs) and $2.29 per pound (drumsticks)

Costco: $6.67 per pound (thigh and drumstick combo pack)

Atlantic salmon

Aldi: $9.15 per pound (fresh)

Costco: $12.99 per pound (frozen)

Dairy products

Organic whole milk

Aldi: $0.07 per ounce

Costco: $0.15 per ounce

Mild cheddar cheese

Aldi: $0.27 per ounce

Costco: $0.25 per ounce

String cheese

Aldi: $0.25 each

Costco: $0.27 each

Cereal

Honey Nut Cheerios

Aldi: $0.31 per ounce

Costco: $0.20 per ounce

Cinnamon Toast Crunch

Aldi: $0.28 per ounce

Costco: $0.20 per ounce

Frosted Flakes

Aldi: $0.12 per ounce (generic private label)

Costco: $0.17 per ounce

Oats and honey granola bars

Aldi: $0.20 per bar

Costco: $0.19 per bar

Beverages

La Croix Sparkling Water

Aldi: $0.25 per can

Costco: $0.57 per can

Sparkling mineral water

Aldi: $0.91 per bottle

Costco: $1.04 per bottle

Snacks

Mott's Fruit Snacks

Aldi: $0.25 per pouch

Costco: $0.15 per pouch

Beef jerky

Aldi: $1.35 per ounce

Costco: $1.79 per ounce

Trail mix

Aldi: $0.24 per ounce

Costco: $0.25 cents per ounce

Which is cheaper?

In general, Aldi's prices for its private label brands are slightly lower on produce, meat, and dairy products than Costco. However, for brand name products, Costco typically offers the better price. Aldi is typically known for having some of the lowest prices on meat around -- especially ground beef! A pound of ground beef costs $2.89 at Aldi compared to $4 per pound at other grocery stores like Kroger. However, when it comes to buying in bulk, you may find that certain cuts of meat are cheaper if you buy them in larger quantities from Costco instead of smaller packages from Aldi.

After comparing the prices between Aldi and Costco on produce, meat, and dairy products, it's clear that both stores offer great deals on a variety of items depending on your needs. Ultimately the decision will depend upon what exactly you're looking for -- if you need just a few things then Aldi might be your best bet. But if you're interested in stocking up on a wide variety of foods in larger quantities, then Costco may be more economical in the long run. No matter which store you choose, rest assured knowing that both places have great deals when it comes to groceries, so shop around before making your final decision.