Is Aldi Similar to Costco in 2024? (Which Is Cheaper + More)
Grocery prices have skyrocketed over 12% in 2022 amid record inflation. Budget-savvy shoppers have flocked to discount chains like Aldi and Costco for relief. But are these two retail giants really comparable in 2024?
As a retail analyst with over 20 years of expertise, I‘ve broken down Aldi vs Costco across key categories:
Drastically Different Business Models
German-born Aldi first entered the US in 1976 with its trademark "no-frills" approach:
- Over 2,150 small-format stores (averaging 16,400 sq ft)
- Headquartered in Batavia, IL
- Focused on operational efficiency
Meanwhile, American retail titan Costco debuted its first warehouse location in 1983:
- Nearly 600 large-format warehouses (typically around 146,000 sq ft)
- HQ outside Seattle, WA
- Leverages $60+ membership fees
So while both focus on discounts, Costco generates significant revenue even before members walk in the door. This grants substantial negotiating leverage with suppliers.
Aldi‘s model trims costs more on the operations side. Tiny labor forces and hyper-efficient checkout boosts profit margins.
The differentiation is clear: one monetizes convenience, the other necessitates inconvenience.
Aldi‘s 15% More US Locations (And Counting)
Costco‘s bulk approach simply requires exponentially more physical space. So despite its 40+ year head start, Costco still has less than half as many US stores as the German grocer.
Aldi Locations: 2,150+
Costco Locations: 590
Rapid expansion plans will widen this gap further. Aldi intends to have over 2,500 locations open by 2025, while Costco grows at a more conservative, opportunistic pace.
Costco Stocks 3X As Many Products
The average Aldi warehouse stocks just 1,400 regularly-available products on any given day. About 1,000 of those goods will be various Aldi-owned brands.
Costco locations, on the other hand, typically carry over 4,000 different items. Top sellers like electronics, jewelry, and home goods drive high membership renewals.
However, only 400 of their products are Kirkland Signature – less than 1/10th of total inventory.
So in terms of brand variety, Costco clearly outpaces its German rival. But Aldi fills more practical grocery needs with its in-house products.
Prices Virtually Dead Even Despite Different Models
Pricing is where Aldi‘s streamlined operation can match up against the bulk leverage at Costco. And 2023 price audits across categories prove it:
| Category | Aldi Price | Costco Price |
|---|---|---|
| Dozen Eggs | $1.43 | $1.39 |
| 2% Gallon Milk | $2.95 | $2.85 |
| 85% Lean Ground Beef (Per LB) | $3.78 | $3.73 |
Consumer access to historical pricing data has kept retailers honest. Yet inflation in dairy and produce extend beyond competitive pressures.
So both chains lean on their business efficiencies to cushion impacts without tanking profitability. But the evidence shows consumers win either way.
Neck-And-Neck Brand Quality
In-house brands were historically seen as "cheap knock-offs" – emphasizing cost over quality. But as Consumer Reports‘ 2022 rankings show, store brands have achieved exceptional quality:
- Costco‘s Kirkland Signature earns #25 overall
- Aldi Simply Nature lands at #28
- Both beat Campbells, Kraft, and General Mills
Kirkland also ranked the #6 food brand overall—the highest for any retail private label. Yet quality perception still trails leading CPG companies like Kraft Heinz according to 2022 survey data.
So both companies now focus on quality AND affordability. Consumers can confidently expect to get more for their dollar when buying store brands.
The Final Verdict: Choose Based on Lifestyle
Costco remains ideal for bulk buyers with large households/storage space. Despite somewhat higher prices recently, the total monthly savings from memberships outweigh the costs for loyal shoppers buying in volume.
Aldi fills the convenience gap between trips to big-box stores. Localization and speed caters well to smaller households with shifting schedules and needs.
So ultimately, it comes down to each family‘s unique situation. Look at shopping volumes, storage space, and product variety to determine the best fit. Costco still corners bulk goods, but Aldi matches them penny-for-penny on staples.
About the Author
Marcus Saint has over 20 years of experience analyzing consumer trends across global CPG and retail categories. His insights are regularly featured in BusinessWeek, Forbes, and The Wall Street Journal.
