Costco has emerged as the preferred grocery retailer for a significant portion of higher-income Americans, according to a recent survey by YouGov. The warehouse club, known for its bulk items and discounted prices, was named the primary shopping destination by 11% of respondents who reported annual household incomes of $150,000 or more.
This finding challenges the perception that affluent shoppers exclusively frequent high-end specialty stores. "Even though the hype says that these wealthier shoppers are going to the Erewhons and the Whole Foods of the world, not necessarily," said Phil Lempert, a food industry analyst based in Santa Monica, California.
The YouGov survey defined higher-income households as those earning at least $150,000 annually, which is more than double the U.S. median household income. Higher-income Americans represent approximately 10% of the U.S. population.
In contrast, Walmart Supercenter was the most popular choice for middle- and lower-income Americans, with 20% of respondents identifying it as their go-to supermarket. Only 5% of this demographic reported Costco as their preferred store.
Lempert suggested that Costco's business model aligns well with the shopping habits of higher-income households. "Wealthier households typically are larger households," he explained. "So it fits perfectly with the model of Costco having larger sizes. Also, wealthier people shop more often, and what they want is value. One of the reasons they have more money is they're frugal."
Costco's annual membership fees, ranging from $65 to $130, were not seen as a significant deterrent for its target demographic. The survey also noted Kroger's notable presence among higher-income shoppers, with 10% naming it as a favorite, a figure that tied with "other" store categories.
Lempert expressed some surprise at Kroger's popularity with this group, but acknowledged that proximity plays a role in consumer choices. "Consumers often shop where they live," he said, adding that Costco stores are predominantly located in larger metropolitan and suburban areas. With rising gas prices, shoppers may be less inclined to travel long distances for grocery savings.
"People are nervous about what the future looks like," Lempert stated. "And when we get nervous, we get more frugal. We have to be smart consumers these days more than ever before."
To navigate rising food costs, Lempert advised consumers to always shop with a list, compare unit prices, and consider online grocery ordering for pickup. He also pointed out that certain products, like pre-cut produce or seafood sold at a service counter, can be more expensive than their less-processed counterparts available in other parts of the store.