Kashi Cereal at Costco — A Cost and Savings Analysis

Posted on | April 23, 2008 |

The situation: 

It always happens this way — just when I’m ready to throw in the towel and cancel my membership to Costco, they go and add something to their inventory that makes me change my mind.  This time it was Kashi cereal.  Kashi Cinnamon Harvest cereal to be exact.  I love this stuff.  And I’m not allergic to any of the ingredients.  The only thing better than a delicious shredded wheat cereal with just the right amount of sweetness and a yummy dose of cinnamon is finding that cereal for a reasonable price at Costco.

Local Pricing:

The best, non-sale price I’ve found so far for this cereal is at Vitamin Cottage for $3.69.  Super Target’s latest non-sale price was $3.74.  The best sale price I’ve found so far was at Kroger for $3.00/box.  While that’s an excellent price, now that grain prices are going through the roof I don’t expect to see that price again any time soon.

Price Calculations:

Naturally, Costco’s packaging was different from the regular grocery store packaging so some basic math is required to calculate exactly how good the Costco price is.

The Costco box includes two 17.7 oz bags or a total product weight of 34.14 oz.  At a cost of $6.49 per box, that comes to $0.19 per ounce.

The Kroger box includes one 17.5 oz bag at a (best sale) price of $3.00.  That works out to $0.17 per ounce — or $0.02 per ounce lower than the Costco price.  That means that if Kroger should ever run their $3.00/box sale again, I’ll know that I should stockpile boxes of cereal.

But to be fair, we need to compare apples to apples — or everyday non-sale to non-sale prices.  In all honesty, Kashi cereal is a staple in my diet and I’m simply not willing (I could even argue not able) to wait for another good sale before purchasing more boxes once my stockpile is depleted.

So, using Vitamin Cottage’s lowest non-sale price of $3.69 for a 17.5 oz box, that works out to $0.21 per ounce, or in other words, $0.03 more per ounce than at Costco.

Savings Analysis:

But now the question begs, how much of a savings is $0.03 per ounce?

My best estimate is that I go through a maximum of 3 boxes of cereal a week.  Or more precisely, I go through three 17.5-oz boxes per week (I’m used to the slightly smaller retail-sized boxes rather than Costco’s two 17.7 oz bags per box).  That’s a total of 52.5 ounces of cereal per week.  The $0.03 per ounce savings then translates into a $1.575 weekly savings.  Over the course of a year that’s a maximum savings of $81.90.

I have absolutely no intention of calculating this example any further — I’ll leave the savings estimate over the course of 10 years with compounded interest to someone with more time on their hands and more interest in completely hypothetical savings calculations.

Conclusion:

All I need to know is that as long as 1) Costco continues to carry this particular flavor of cereal and 2) I continue to enjoy it and, heaven forbid, I don’t develop an allergy to any of the ingredients, the annual savings on my cereal alone will justify the cost of our Costco membership.

What this analysis also tells me is that the annual savings, though nothing to sneeze at, isn’t large enough to make frequent or special trips to Costco for cereal.  It’s easy to pick up a box or two of Kashi cereal at my regular grocery store and it doesn’t cost me anything extra in time or gasoline.

Therefore, if I happen to be near a Costco when it’s about time to replenish my stock, then Costco is the best pricing option.  Otherwise, I’ll know to only pick up a box or two at the grocery store to tide me over until the next Costco run.

Related Posts for Further Reading

• No Related Posts

Comments