Costco tries to win where McDonald's failed
When I’m shopping at Costco, I tend to want to get in and out of the store as quickly as possible. That’s because I have very little patience for large crowds, which Costco tends to attract. Thankfully, as an Executive member, I’m now able to enter the store an hour early on weekdays. And so far, ...
When I’m shopping at Costco, I tend to want to get in and out of the store as quickly as possible. That’s because I have very little patience for large crowds, which Costco tends to attract.
Thankfully, as an Executive member, I’m now able to enter the store an hour early on weekdays. And so far, that’s led to a much calmer shopping experience.
In fact, on my last Costco shopping trip, rather than run up and down the aisles frantically trying to rush through my shopping, I took a little extra time to wander. And I came across some interesting finds – spices I never knew Costco carried, a new cheese I didn’t recognize, and a very surprising addition to the bakery section.
The bakery is one area of Costco I sometimes try to avoid – not because it’s not delicious, but because I’ve been known to take down an entire cheesecake by myself, and that’s not ideal on any level.
This week, not only did I spot the famous seasonal pumpkin cheesecake at Costco, but I also noticed an assortment of new dessert bars.
But those finds weren’t the most exciting thing I spotted at the Costco bakery. My latest find was a very happy surprise. Image source: Shutterstock
Costco has started selling Krispy Kreme in some locations
One of the strategies Costco uses to keep members happy – and to encourage them to keep renewing – is to introduce new inventory on a regular basis.
Often, Costco will produce its own Kirkland version of new products it’s interested in carrying. But sometimes, it will partner with well-known brands to deliver even more value to members.
Related: Costco’s aggressive new tactic upsets members
It’s with this in mind that Costco has entered into a partnership with Krispy Kreme to sell donuts in select locations. At my local store, a 15-pack was priced at $15.99.
Considering that a single Krispy Kreme donut at the closest location to where I live costs $2.19, and a dozen of the original glazed flavor costs $17.49, this is clearly a good deal -- if you like donuts, of course.
But the value in offering Krispy Kreme goes beyond the lower price.
Not everyone has easy access to a Krispy Kreme location. By bringing those iconic donuts in house, Costco just gave a lot more people an easy way to get their fix.
Of course, not everyone is excited about Costco getting into the Krispy Kreme game. As one Reddit user said, “I like Krispy Kreme. But I won't ever buy them from any store other than their own stores. They're never good or fresh at other places.”
Other users were quick to chime in that if it wasn’t fresh Krispy Kreme, it wasn’t worth buying.
But I’d still argue that this addition is a positive one. Besides, there’s nothing like a little microwave or air fryer action to turn day-old donuts into a warm, delicious treat.
Costco could win where McDonald’s failed to succeed
Costco isn’t the first big name to try to partner with Krispy Kreme. In late 2022, McDonald's began serving Krispy Kreme to amp up its dessert game at select locations.
While most people aren't necessarily heading to McDonald's for dessert, some folks like to chase a Big Mac and fries with something sweet.
But earlier this year, Krispy Kreme and McDonald's hit pause on that rollout.
At the time, Krispy Kreme said the partnership didn't seem worth expanding given that demand for the product was lower than expected among McDonald's customers.
Related: Costco makes major food court change
Whether Krispy Kreme encounters a repeat at Costco is yet to be seen. But there are a few reasons why the model might work better at Costco than at a fast food chain.
McDonald’s customers may not order dessert until they’ve finished their meals, at which point they may be too stuffed to contemplate taking down a donut. At Costco, it’s common for people to shop on an empty stomach. And hungry shoppers tend to be lured into impulse food purchases.
Also, when members see a product at Costco, their brains are often wired to think that they’re getting a great deal. So Costco customers may be willing to overlook the freshness factor if it means scoring a bargain.
Finally, for some people, Krispy Kreme is a novelty. That alone could drive sales, making the partnership a lucrative one for Costco and Krispy Kreme alike.
Maurie Backman owns shares of Costco.
Related: Much-disliked Costco change brings members hidden benefit
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