Tuesday, April 21, 2009

Costco Takes an Interesting Tack in Responding to the Recession

We noticed something new at our local Costco last weekend: USDA Prime steaks. Previously, the butcher section of the Hackensack Costco only carried the lower grade, USDA Choice. We picked up some Prime-grade rib eye steaks for $8.99 per lb. After marinating them in a little red wine (a drinkable $4 dollar bottle of Chilean Shiraz from Costco's liquor store), Worcestershire sauce, olive oil, and steak seasoning, I threw them on the outdoor grill for ten minutes, flipping them once half way through. Cooked medium rare, they were excellent. With a Choice steak, there's usually 10% or 20% of it I don't want to eat and I end up feeding to the dog; with this one, he just got a couple of tiny pieces.

Interesting tack for Costco, going upmarket a little in a recession. It probably makes sense. Last summer, Ruth's Chris offered a special dinner for two for $89, and, today I heard a radio commercial for a similar $90 deal at one of Manhattan's upscale steakhouses, Ben Benson's. Upscale steakhouses are going a little down market, and Costco's going a little upmarket: they're both competing for customers who want prime steaks but don't want to pay prime prices for them.

The image above, of the Prime-grade rib eye steaks, comes from Costco's website. According to the site, these are 1855 Brand steaks, packaged for delivery. The steaks we bought were cut by the in-store butchers and were less expensive.


Ruth Chris said...

I tried the Costco prime rib-eyes also and found them excellent.

They had a big sign near the meat fridge that welcomed comments regarding the higer grade meats [Chew the fat with the store manager].

Is that reason enough to take a 'stake' in COSTCO shares?

DaveinHackensack said...

Didn't see that sign, but I'll be sure to give them some positive feedback next time. Hopefully, others will share our reaction and keep buying the steaks. Otherwise, Costco might stop selling them. A few years ago, they went upmarket and offered caviar, and then dropped it.

As for taking a stake in Costco, I think it's a great company, but I'm not sure it's a great value at these prices. Maybe after the next market swoon it will be.

Clara Peller said...

Where's the Beef?

Paul Price said...

Oh my god! Christine is gone!!!!