Costco Alcohol Q & A

I have mentioned several times that I don’t drink alcohol. Nevertheless, I have written several posts about the alcohol at Costco (Facts About the Alcohol at Costco); (Alcohol at Costco (Part 1 of 2)); (Alcohol at Costco (Part 2 of 2))). Many people are interested in the alcohol section at Costco and likely want more information about it. I figured I’d condense some information I  found about common questions about the alcohol at Costco.

1. Number of different liquors that Costco sells?

Costco sells between 45-60 unique items (SKUs) of spirits and 150 of wine. The most items are available during holidays.

Not knowing anything about alcohol sales, I had no idea what is typical for selling alcohol. I did some research and found that liquor stores typically sell 500-1500 SKUs (larger stores may carry 2000-3000). 

2. Costco’s markup on alcohol in comparison  to other liquor stores?

Two factors enable Costco to sell alcohol (and all items) at lower prices than do other stores. First, by limiting the number of items sold (Freedom of or from choice?), Costco can focus on selling the most popular items that bring in the most profit. Second, membership costs enable Costco to keep the markups on all of their items low (Increase in membership fees), Costco can limit the markup on alcohol to between 10-14%. In contrast, other liquor stores mark it up 25-50%. The article also pointed out that mark ups can be 80% for cocktails and 400-500% for shots at bars. 

It is not surprising that Costco’s low markups apply to alcohol as well. However, the comparison to restaurants or bars is not fair. Any item will cost significantly more in a restaurant due to overhead/labor. For example, a few eggs cost less than $1 but may cost $20 in a restaurant and a carton of ice cream may cost $4 in a grocery store and even more for one scoop in an ice cream parlor.

3. Membership required to buy liquor at Costco?

The membership requirement depends on the state. A few states (Arizona; California; Colorado; Connecticut; Delaware; Hawaii; Indiana; Kentucky; Massachusetts; Michigan; Minnesota; New York; Texas; Vermont) enable nonmembers to buy alcohol. All other states require membership.

I knew that there were some states that don’t require membership. I’d be curious if many nonmembers buy alcohol at Costco.

4. Allocation of rare and limited liquors?

Costco sometimes sells rare liquors but is secretive about where to find them. However, there are a few trends. First, they are more likely to be found in wealthier areas (e.g., NY) than less wealthy ones (e.g., Midwest). Second, liquors more common in certain regions are likely to show up there first (e.g., Bourbon in the Southeast). Third, alcohol from other countries are more likely to be sold in areas with higher  numbers of members of that community (e.g., Japanese whiskey in areas with more  Japanese residents). 

I will certainly not be looking for these liquors but the trends are likely helpful for others and make sense.

5. Determining what liquors Costco has in stock?

Whereas one can look up most items at Costco online, Costco doesn’t post its alcohol stock online. With so few of particular items (sometimes they only have a few bottles of a particular product), it may be sold out and no longer there by the time members see it online. However, for more common items, members can look up either same day delivery or Instacart to see what is in the store at a given time.

It makes sense that Costco would not list the rare items online, as it would be very frustrating to get excited to purchase one, only to have it be gone by the time one makes it to the store. In addition, I imagine it would be confusing and time consuming to update with items of which there are only a few.

6. Are Costco’s pricing codes applicable to liquors (and wine)?

Members can get information about the special deals in alcohol by looking at the specific price endings. Price endings of “93” mean that Costco had gotten a batch of alcohol at a lower-than-normal price. The store then “shares” these savings with members by pricing them at a lower cost than usual. However, the low price is not permanent. Price endings of “89” mean that the Costco price is better than that of competitors by at least 10¢ which is signified by a price ending in “89.” Finally, price tags with asterisks indicate that the item will not be restocked. 

I have written about the significance of the price endings before (Price endings are not random) and it is helpful to know these ones that are applicable to the alcohol. I don’t think 10¢ seems like it is worth it to have a code but I know the article did say “at least” 10¢.

7. The companies are behind the Kirkland liquors?

Many of the liquors sold at Costco are Kirkland brand and are praised for the prices and the quality. Although Costco tends to be secretive about the name brands behind the Kirkland label, members have made several guesses (e.g., Crown Royal; Jim Beam; George Dickel;  Alexander Murray & Co.). One common guess that has been denied by Costco is that the Kirkland vodka is Grey Goose. Instead, the vodka comes from France’s Gayant Distillery. Costco is open about the source of its tequila, acknowledging that it all comes from the Norma Oficial Mexicana, and the number can tell the specific distillery.

I’m not surprised that the Kirkland brand is high quality. I wonder if people ever do taste tests comparing the Kirkland brand to name brands.

8. Returning liquor and alcohol?

Whether or not members can return alcohol depends on the state. The article cautions against returning too much alcohol because Costco can revoke membership if members abuse the return policy. In addition, the ease of return depends on whether or not the person returning the alcohol is a member or not. Members do not need a receipt because Costco can check the online record. In contrast, in the states that do not require membership, receipts are required because there is no online record. 

Did you know this information about the alcohol at Costco?