Saturday, January 22, 2011

Is Weird Stuff Smaller at Costco?

As an economist, it's hard for me to shop at Costco. Everything in life is subject to diminishing returns, so while the first pack of trail mix might be great, I'll probably be sick of it by the time I get to pack 18.

I often find myself thinking: Even if half of this item goes bad, it would still be a good deal. Plus, as someone who lives in a relatively small apartment, it's sometimes difficult to make the size-price tradeoff.

Above is 5 pounds of butter and 16 ounces of lobster spread, the only size available for either product. At a normal supermarket, these products would be about the same size. Yet Costco's lobster spread container doesn't even seem to be comically bigger than its mainstream counterpart, as most items at Costco do.

Costco can get away with selling staple items like paper towels in huge portions, because people figure they will use them all eventually. However, this is less true for more specialized items. We picked up the lobster spread after trying a free sample; if it had only come in a 5-lb. container, we probably would have seen that as too big of a commitment.