Forget Costco: Here Are 4 Lower-Cost Stores

The words, "Forget Costco" may strike horror into the hearts of many loyal Costco members. The warehouse giant's dedication to high-quality -- and affordable -- products is the bedrock of its business. And for some shoppers, the game of squeezing the most possible value out of their Costco membership gives them as much joy as its samples and $1.50 hot dog combo.

That's all well and good. But if you're looking to cut the cost of your grocery bill, there are cheaper stores out there. Ones that don't charge an annual membership fee.

It is worth at least considering. The average American household spends around $5,700 on groceries, per the Bureau of Labor Statistics. If you were able to cut that bill by, say, 10%, it would translate into $570 to sock into a savings account or put toward a vacation.

Here are four lower-cost grocery stores that are worth checking out.

1. Aldi

The latest rankings from customer data experts, Dunnhumby, put Market Basket, WinCo, and Aldi as the top three stores price-wise. Dunnhumby looked at in-store data and opinions of over 10,000 shoppers to rank grocery stores across a range of categories.

However, with almost 2,400 U.S. stores, Aldi is our first pick because it has a much bigger footprint than the other two. Aldi is gaining traction in the U.S. because its no-frills stores are actually pleasant to be in. Sure, you'll need a quarter to unlock a cart. But Aldi still boasts well-lit stores with plenty of aisle space.

Aldi's CEO says switching to the chain can save you as much as 40%. We put that claim to the test with a basket of 20 items online last month -- in truth, the only way you'd save that much is if you currently shop at Whole Foods. Even so, Aldi still costs less than both Walmart and Kroger, and even small weekly savings can add up.

2. WinCo

If you live in the Western or Midwestern U.S., you have likely come across this employee-owned discount haven. WinCo keeps prices low by buying directly from farmers and aggressively reducing costs. For example, you'll need to bag your own groceries and it does as little advertising as possible. One catch? If you're after credit card rewards, you'll have to look elsewhere -- WinCo does not accept credit cards.

3. Market Basket

Market Basket only has stores in New England. However, the chain is Dunnhumby's number one in terms of price, promotions, and rewards. The much-loved local brand features low prices and a strong customer focus. Indeed, a 2022 price comparison by Consumers' Checkbook showed that a typical family might save over $1,000 a year by switching from Target to Market Basket.

4. Walmart

If you live in a smaller household and won't benefit from Costco's bulk buys, you may well find Walmart is a better choice, price-wise. Dunnhumby placed Walmart fifth for price, while Costco didn't make the top 10.

That said, Walmart and Costco are very different beasts, making it challenging to do a direct price comparison. We did a quick check for a few staples online and found pasta, basmati rice, and tuna all cost less at Walmart. However, so much depends on what products you buy. Not only that, but Costco shoppers will often find better prices in-store.

Cutting your grocery bill

Switching stores can be a great way to cut your grocery spending. Another effective strategy is to layer the benefits of cash back apps, coupons, and credit card rewards. By combining multiple offers and rewards, you can supercharge your money back. I'm also a big fan of meal planning. It can be a hassle, but it is a fantastic way to reduce waste and keep your grocery budget under control.

The list above shows that smaller, local brands often give you more bang for your buck than big chains. If you're a big Costco shopper, you don't have to forget the brand completely. Nonetheless, it is worth checking in with other stores occasionally to know you're still getting the best value for your money. Especially as Costco will refund your membership fee at any time if you're not satisfied.