Costco’s new rule could be a costly mistake

Anyone who’s a longtime Costco member knows it’s the one place where it’s okay to shop on an empty stomach. 

That’s because in addition to the free samples you’ll find throughout the store, there’s also the famous Costco food court.

Costco’s food court is known for its cheap, filling meals. Granted, they may not be the healthiest meal, but we can’t have everything, right?

Still, it’s hard to beat some of the deals Costco’s food court offers. For one thing, the company has maintained its $1.50 price point for the hot dog and soda combo for 40 years. At a time when just about everything else is up due to inflation, that’s pretty darn amazing.

You can also grab other cheap eats at Costco’s food court, depending on your mood.

Costco food court menu and prices

• Hot dog and soda combo: $1.50
• Pizza slice: $1.99
• Whole pizza pie: $9.95
• Chicken bake: $3.99
• Ice cream cup: $1.99
• Ice cream sundae: $2.49
• Caramel brownie sundae: $2.99
• Giant chocolate chip cookie: $2.49
• Fruit smoothie: $2.99
• Rotisserie chicken Caesar salad: $6.99
• Combo calzone: $6.99
• Hot turkey and provolone sandwich: $6.99
  Source: Country Living

Granted, some of these deals are a bit more wallet-friendly than others. But even the pricier items on the Costco food court menu offer a lot of food for your money.

Costco changed the rules on food court access

Although many people flock to Costco for the savings on things like groceries and household essentials, the food court has long been a draw. And for many years, non-members could simply visit a Costco warehouse, buy a food court meal, and go about their day.

Granted, non-members couldn’t come grab a meal and then buy things at Costco. But for a long time, Costco allowed non-members to eat at its food courts because it was an easy way to get more people in the door and interested in signing up for a membership.

As early as 2020, some Costco locations started posting signs that food courts were for members only. And in 2024, Costco started officially cracking down on food court access for non-members.

A timeline of Costco’s food court rules

• Pre-2020: Non-members could eat at the food court without restriction.
• 2020: Some Costco locations started posting signs limiting food court access to members.
  Source: Fox Business
• 2020-2023: Costco’s member-only food court policy was in effect but not widely enforced.
  Source: Mashed
• 2024: Costco began strictly enforcing the members-only rule at its food courts.
  Source: CBS News

Why cutting off food court access could be a huge mistake for Costco

Costco had its reasons for limiting its food courts to members.

First, Costco relies on membership fees for revenue. And it needs a way to make members feel like their annual fees are worth paying. By denying non-members food court access, it strengthens the case to keep paying $65 a year for a Gold Star membership or $130 a year for an Executive membership.

Also, crowds have long been a huge problem at Costco. Allowing non-members food court access may not lead to longer checkout lanes, but it does mean more bodies in the store and more parking spaces filled.

Related: Costco sees shift in member behavior

As former Costco CFO Richard Galanti told Axios, “One of the challenges is that some of the food courts have gotten so busy, particularly if it’s near some office buildings or construction sites. We were getting member complaints.”

By denying food court access to non-members, Costco is doing its part to make its warehouse clubs less crowded overall.

Still, Costco may be hurting itself by making its food court off-limits to people who aren’t members.

The food court once served as a low-friction touchpoint that introduced people to the wonder that is Costco. But if new shoppers can’t get an easy peek inside the store, prospective members may be less likely to join.

Also, Costco’s decision may push consumers looking to join a warehouse club toward its biggest competitor — Sam’s Club.

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Unlike Costco, Sam’s Club does allow non-members to eat at its cafes. Between that and the fact that Sam’s Club offers lower membership prices, shoppers may be more likely to give the Walmart-owned warehouse club a go.

All told, Costco’s food court decision is a major gamble for the company. While the company may have been motivated by a desire to improve the member experience, it could end up losing prospective members by cutting off access to unbeatable food deals that have long brought customers to its doors.

Maurie Backman owns shares of Costco.

Related: Sam’s Club quietly made a Costco-like change members will love