Kashi Cereal at Costco — A Cost and Savings Analysis

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.

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