Costco Membership Value: Pet Food and Diapers Alone Cover $65 Fee

The Costco membership value can recover not only the break-even point but far more than the $65 annual fee, according to an analysis that shows which items allow members to recoup the cost most quickly.

The item that delivers the greatest benefit to members is pet food. A 38-pound bag of Blue Buffalo dog food, priced at about $111 at general retailers, sells for $65 at Costco, saving roughly $46 per purchase. Assuming 10 purchases per year, the “payback score” reaches 713.

Childcare products also pay back the fee quickly. A 156-count pack of Huggies diapers costs $50 at Costco and $70 at general retailers, creating a $20 gap per purchase. Fewer than four purchases offset the annual fee, and with monthly purchases, the payback score reaches 373. Infant formula(Similac) is priced at $55 at Costco and $68 at other retailers, allowing the fee to be recovered after just five purchases.

In the food category, coffee and cheese stand out. Starbucks Pike Place whole-bean coffee is priced at $8.40 per pound at Costco, compared with about $12 at general retailers. Assuming 30 pounds per year, the payback score reaches 166. Tillamook cheese carries a $2.60-per-pound price gap, and buying 25 pounds annually brings the score to 102, close to covering the membership fee.

Mid-range items include bacon (85), chicken stock (83), and Greek yogurt (71). By contrast, household goods such as toilet paper (67), pasta (54), water filter and dishwasher capsules (45 each), HVAC filters (43), contact lens solution (42), and allergy medicine (40) recover costs more slowly when purchased alone. Items with smaller price differences, such as cooking oil (25), laundry detergent (22), and vitamins (18), score even lower.

The $1.50 Costco hot dog combo saves about $45 annually if purchased once a month, compared with a typical $5.30 combo elsewhere. An 18-inch large pizza is about $12 cheaper than comparable options, meaning six pizzas a year can offset the membership fee. By contrast, the $5 rotisserie chicken offers less recovery than expected because the price gap with regular supermarkets is smaller.

Business Insider (BI) reported that the break-even point of a Costco membership is determined not by buying in bulk alone, but by how often items are purchased and how large the cumulative price gap becomes.

An industry official said, “If members do not consistently buy high-frequency items at Costco, the value of the membership is inevitably limited. The economic benefit of Costco is ultimately decided in each household’s shopping cart.”

BI recently analyzed which items generate the most membership value by comparing Costco prices with those at Walmart, Amazon, and Target, and by assuming annual consumption for a two-person household to calculate a “payback score” (a metric showing how much a single item recovers of the $65 fee).

A score of 100 means a single item can fully offset the $65 annual fee. A score of 200 represents savings equal to twice the fee, while a score of 50 means that item alone recovers about half the cost.

By Eun Young Lee lee.eunyoung6@koreadaily.com