There has never been a more competitive era in retail, and customers ultimately benefit from the lower prices and selection.
However, knowing where to shop – which store is right for you and your family – can be a challenge.
If you can shop at both Walmart and Costco, you might be torn on which store has what you need.
Here is a Walmart Vs Costco breakdown, with everything from company background to products, to prices and even customer service and investment thoughts.
Walmart Vs. Costco
Walmart Vs Costco: Companies
With its 11,000 stores in 27 different countries, Walmart is a fairly well-known entity by now.
Founded in the 1960s by Sam Walton, it is still headquartered in Arkansas but has grown far beyond its Southern roots.
Walmart has been a publicly traded company since 1997, now operates warehouses called Sam’s Club, and is eyeing the financial sector next.
Costco Wholesale Corporation, or just Costco, was founded in 1976, though it was called Price Club until 1983.
The multinational company operates 800+ stores in 13 countries so far, but still calls Issaquah in Washington state home.
Costco stores, which follow the discount-pricing warehouse business model, compete more directly with Walmart’s Sam’s Club and BJ’s Warehouse stores.
As one of the largest retailers in the U.S., Costco’s net worth is currently about $80 billion.
Walmart Vs Costco: Stores
First, the most significant difference between Walmart and Costco stores is who can enter.
Costco is membership-only, with an annual fee of $60 (or $120 for the Gold Star Executive plan).
Walmart has no membership fees – anyone can walk in and start shopping.
Once you step inside a Walmart or Costco, one feels somewhat familiar to the other at first.
For starters, both stores encompass a jaw-dropping amount of square footage – on average, about 179,000 square feet for Walmart and 140,000 square feet for Costco.
All that space allows for extra-wide aisles, for extra-wide carts that can fit a lot of goodies. Ceilings feel impossibly high.
From there, though, the layouts drastically diverge.
Walmart stores – at least the ones I’ve seen – follow one or two different layout approaches, but for Supercenters, grocery and the rest of the goods reside on separate sides of the store.
Costco stores make use of all that vertical space by stacking stock sky-high, but their layout has also been subject to analysis by retail experts.
Costco has worked closely with designers to create an anti-anxiety atmosphere that guides customers along a “path” through the store.
This gentle herding, leading shoppers through strategically placed products, encourages them to buy as much as possible.
Walmart Vs Costco: Products
As I mentioned, Costco stores follow a warehouse model – product comes in bulk, albeit at discount prices.
For as big as Costco stores are, it might surprise you to learn that they typically only carry about 4,000 items.
Walmart sells items individually (though some items come in bulk packaging). A single Walmart store can carry as many as 142,000 items.
So for those reasons, choosing which store to visit if you only want to make one trip is a matter of analysis.
Do you have a large family or need to stock up for less? Costco it is. Do you prefer a lot of variety or are you loyal to certain name brands? Walmart is your better choice.
Below are the very similar departments both stores contained within.
- Clothing And Accessories
- Beauty And Personal Hygiene
- Sports Gear
- Home Goods
- Household Essentials
- Office Supplies
- Garden And Outdoors
- Pet Supplies
- Toys And Games
Some Walmart stores also have crafting departments that still sell fabric off bolts.
Costco stores also sell various pre-made gift baskets with their floral department.
Also, Walmart has a wider selection of prepared food – think, fried chicken and sides, hot meals, etc., all for carry-out.
While Costco has its own beloved food court, complete with hot dogs, pizzas, smoothies, and even ice cream for low prices.
Private And Exclusive Labels
Of course, no big chain retailer would be complete these days without private or exclusive labels and brands.
After all, this is part of the business model that keeps prices so low.
Here are some of Walmart’s most popular and recognizable store brands:
- Sam’s Choice – “Premium tier” food products
- Marketside – Deli-style foods
- Equate – Pharmacy, health and beauty items
- Mainstays – Home décor and home goods
- Parent’s Choice – Baby goods
- George/Terra & Sky, Time and Tru, Wonder Nation – Apparel
Costco has one major private label brand: Kirkland.
Kirkland is actually named after the town in Washington state where an early store was located.
Walmart Vs Costco: Prices
Prices are a major motivating factor for most shoppers, especially when it comes to keeping the kitchen and pantry well-stocked.
So which store has the better prices on grocery staples?
Gina Zakaria for Money.com did a price comparison between the two giant retailers and found that, on the whole, Costco prices were cheaper than Walmart’s.
However – and this is a big however – while the price per unit or ounce or pound is cheaper at Costco, you’re locked into buying more of it.
So if you get the cheaper shredded cheese at Costco and you forget to freeze the other pound you didn’t use and it goes bad, you’ve just wasted all those savings.
Walmart Vs Costco: Services
Walmart and Costo offer additional services in-store through pharmacies, banking, vision centers, and photo printing.
While both offer auto services, some Walmart stores have garages attached, where they perform oil changes and tire services on-location.
Additionally, Costco subcontracts or partners with companies to offer services like home improvement (flooring, even solar installation), mortgage purchase, and insurance plans.
Walmart Vs Costco: Customer Service
In 2019 the American Customer Satisfaction Index (ACSI) released its findings after surveying over 62,000 shoppers.
When it came to customer satisfaction, Costco took the top spot. Forbes.com cited Costco’s “customer-first culture” as a huge part of the reason.
To Costco’s score of 83/100, Walmart placed lower down with 74/100. While not an awful score, it was one of the bottom scores.
It doesn’t end there, though – MarketWatch published an article called “4 Reasons Walmart is the most-hated retailer in America.” Yikes.
They wrote, “Walmart isn’t exactly known for its friendly and helpful employees…”
That bears out for me personally. Service with a smile is never a given, and I’ve been treated borderline hostilely by employees at the service desk.
Walmart Vs Costco: Return Policy
Walmart has an excellent return policy – 90 days with a receipt and you get your money right back; without a receipt, you get store credit.
They’ve even taken back opened milk and refunded it for me. (For more on Walmart’s return policy, click here.)
Yet somehow Costco’s generous return policy has them beat. As Clark.com puts it, “You can basically return anything, at any time, no questions asked.”
The only exceptions concern electronics, diamonds, cigarettes and alcohol, tires and batteries, and custom-ordered products, like personalized mugs – which is pretty fair.
Other than that, even if you don’t have a receipt, it appears that Costco will take the item back and refund you.
For Costco’s full return policy, read here.
Walmart Vs Costco: Employee Wages
If you consider good wages to be part of a company’s ethical footprint, Walmart and Costco tell different stories.
Walmart employs about 2.2 million people internationally, and in the U.S. their base wage starts at just $11.
While that is higher than the federal minimum wage of $7.25, that is a very difficult amount to get by on, especially in a single-income family.
While Walmart recently announced they were “bumping” wages to make the average hourly $15, wording counts.
Only about 425,000 employees in the U.S. will start making $13/hr. – which brings the total average up, not the baseline wage.
Costco, on the other hand, famously pays its employees well. They recently raised their starting wage to $16/hr.
That makes the retail giant’s average hourly wage a whopping $24/hr.!
Walmart Vs Costco: Stock
If you want to include a discount retailer in your investment portfolio, it’s worth looking into either Walmart or Costco.
James Brumley at The Motley Fool thinks that Walmart ultimately has the better horse in the race.
He cites Walmart’s stock price and valuation, lack of membership pricing (Costco’s is projected to increase), and adaptability as strong reasons for picking Walmart over Costco.
Walmart and Costco embody the saying “different strokes for different folks” to me, because while they compete for discount dollars, they offer divergent experiences.
Costco remains the better option for larger families, shopping for a party or event or when you’re looking to stock up once or twice a month.
And Walmart is a great everyday go-to, with low prices, expansive selection and the greater store accessibility.