Is Costco's Same-Day Fresh Food Delivery Worth It?

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Costco recently added produce, meats, fish, dairy and other fresh groceries—including its popular rotisserie chicken—to the roster of items available for same-day delivery.

If you're a member and order at least $35 worth of groceries, there is no additional charge—unless you opt to tip the delivery person. Non-members can enjoy this service, too, by ordering Costco items through Instacart, the grocery delivery company.

Costco scored highly for value in our most recent ratings of grocery stores. But does that same value extend to its delivery customers? And how does it stack up against other chains that offer grocery delivery?

To find out, we went shopping over a period of several weeks this fall in a Costco Warehouse near our Yonkers, N.Y., headquarters, and we also shopped online. We chose a market basket of nine popular Costco fresh food items—including that rotisserie chicken—and we opted for same-day delivery.

What We Found

For our particular market basket of fresh food, we found:

• Costco's member pricing for delivery was 31 percent higher, on average, than what it charged members in its warehouse (see chart below). Costco says those higher prices reflect the cost of service and delivery; unlike with other delivery services, you pay no additional fees beyond the price of the food, assuming an order of at least $35.

• Costco non-members who subscribe to Instacart Express would pay slightly less than Costco members for this particular basket of food. But Instacart's additional, per-delivery service fee—$5 in most places—makes delivery to non-members more costly. If your main reason for using Instacart Express was for its Costco deliveries, you'd be better off paying $60 for Costco's basic, Gold Star membership.

• Compared with AmazonFresh, which also delivers fresh groceries in many markets, Costco fresh food delivery was a pretty good deal. Costco's delivered parcel of food was less expensive than a comparable basket of items from AmazonFresh—which didn't offer us same-day delivery, as Costco did.

Weighing the Benefits of Membership

How you place a same-day delivery order for Costco fresh food depends on whether you're a member or not. Costco members order through Costco's website or app. Non-members can do it by using the website or an app from Instacart. Either way, the food is gathered and delivered by Instacart shoppers. Either way, the minimum order is $35.

For Costco members, service and delivery fees are baked into the food prices they pay. They don't pay extra unless they opt to tip the driver.

Non-members, on the other hand, pay Instacart a $5.99-per-order delivery fee and a per-order service fee of $5 in most places ($7.50 in New York City). Again, tipping is optional.

To save money on deliveries, Costco non-members can join Instacart Express, which costs $149 a year. As an Instacart Express member, you pay no additional delivery fees on orders of $35 or more. Instacart charges no delivery or service fees on orders made in the first two weeks of your membership. After those two weeks, however, you must pay the service fee.

We shopped the same market basket of food periodically over several weeks this fall for Costco members and non-members. To determine which was the better deal, we factored in the Instacart Express membership (including a one-time $15 promotion) and the Costco Gold Star membership.

We found that the price of the food itself was slightly more expensive for Costco members than for Costco non-members. A Costco spokesperson, presented with those findings, explained that was because delivery and service fees are built in to member pricing.

But once that pesky $5 Instacart service fee was added in, the scales tipped decisively in favor of Costco members.

An Instacart spokesperson confirmed the Instacart fees but declined to comment further.

Keep in mind that membership with both Instacart Express and Costco offers other benefits. With Instacart Express, you can order same-day deliveries from dozens of affiliated grocers. Costco membership includes numerous perks—vacation and rental-car deals through Costco Travel, to name just two.

Delivered Price Higher Than In-Store Cost

Our shopping test revealed that Costco fresh food prices purchased through the Costco website for same-day delivery were 24 percent to 46 percent higher than the same foods sold in the Costco warehouse. In total, the delivered market basket cost 31 percent more overall for Costco members.

A Costco spokesperson said those higher prices reflected the cost of service and delivery.

(Turn your smart phone sideways for a best view of our comparison chart, which is a snapshot from one day's pricing.)

When the Price Premium Is Worth It

For many people, paying 31 percent more for delivered food is a costly deterrent to choosing delivery. But if you're time-starved—or would simply rather avoid the drive to and from the warehouse, the search for parking, the wait in line, and the cost of gas and wear-and-tear on your car—that extra expense might be worth it. You'll also avoid the inevitable impulse buying that happens when you pass by certain food displays, say, or see a deal on a smart TV.

There's also the time-is-money consideration. In the chart above, which represents one day's shopping, our online market basket cost $113.48 without tax, versus $86.77 for the in-store haul, a savings of $26.71. Our Costco shopping trip took about an hour from the time we left home to the time we returned. In this case, a shopper whose time is worth more than $26.71 an hour might be better off ordering this particular market basket from home.

Good Value vs. Other Grocers That Deliver

If you're already convinced of the value of using online grocers, you may want to know how Costco's delivered prices compare with AmazonFresh, which delivers fresh Whole Foods groceries to many parts of the country. In our limited test, Costco was nearly always less pricey, by a couple of dollars.

A comparable market basket was $116.49—more than the Costco order but minus the unavailable rotisserie chicken.  AmazonFresh also didn't give us the option of same-day delivery. AmazonFresh costs $14.99 a month on top of an Amazon Prime membership of $12.99; orders under $50 are charged $9.99.

An Amazon spokesperson declined to comment on the pricing, but pointed out that the service's pricing was less costly than Instacart's.

On a per-week basis, AmazonFresh's delivery fee for our market basket—including the one-month free trial—would be $3.17 per order, lower than the price of Instacart Express ($7.37), but higher than the Costco membership ($1.15). Adding on the Amazon Prime membership would bring the weekly delivery price to $6.17 per order—though to be sure, you can use that Prime membership for many other services, including free delivery of other items.

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