Costco Is Discontinuing a Popular Product—and More Items May Follow
Costco does many things well, and among them is the cultivation of its top-quality in-house brand, the beloved Kirkland Signature. In fact, warehouse-goers often prefer Costco's own versions of certain products over the more hyped, better-known name brands. So it's pretty devastating to learn that the warehouse is pulling the plug on the production of a popular chocolate item that many have grown to love.
A Costco shopper recently pointed out in a Reddit post that their warehouse has now replaced the Kirkland Signature Chocolate Chips with Nestle's Chocolate Chips.
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It's clear that shoppers have started to notice and feel the effects of Costco's decision to discontinue both its Semi-Sweet Chocolate Chips (red bag) and the more premium Semi-Sweet 51% Chocolate Chips (blue bag). This news came to light several weeks ago when Costco added its famed "Death Star"—aka the discontinuation asterisk—next to the two products in stores, and also circulated a detailed internal memo about the decision.
According to the memo, which has been shared on Reddit, the decision was made due to rising prices of cocoa, which would make it impossible for Costco to maintain its competitive pricing against Nestle. "Cocoa costs have risen near 200% compared to last year and this is impacting all items in this category, including branded items such as Nestle Tollhouse," the memo reads. "For perspective, the estimated sell for Q3/Q4 on KS Red Bag would be $16.99 vs Nestle at our competitors at $15.48."
However, there's a small silver lining. For one, Costco will still be able to offer Nestle's replacement chocolate chips at a price of $13.99 per ounce, which is still cheaper than buying them from other retailers. And likely anticipating disappointment from shoppers, the company didn't close the door on the possibility of bringing the products back once the economics of it make sense. "It's likely we will stay out of KS for at least 12 months, but our long term plan is to offer the item again in the future."
Unsurprisingly, shoppers are sad about the decision, but many commend Costco for the transparency and its commitment to quality at a value.
"They are seriously the best chocolate chip ever. I use them for chocolate fondue, chocolate pudding, brownies, cc cookies, drinking chocolate. Anything chocolate—it's my only go to! Nothing else compares and I tried to find something as good when they discontinued them a few years back."
"Well I for one would cheerfully rather pay an extra buck fifty to buy Kirkland instead of Nestle, but I guess they've made their point."
"That's a good transparency in there from a reputable company."
Others, who aren't as thrilled at the idea of switching over to Nestle, have started suggesting more alternatives that compare to Kirkland's chocolate chips in value and quality.
"Trader Joe's semi sweet chocolate chips are our favorite and also dairy free/vegan."
"Buy less if you have to but buy Guittard. Family owned."
"Just tried these private label Aldi ones, indeed very solid for the money."
And while there are certainly some good replacements for this product on the market, the question is whether Costco will discontinue or change more of its products that include chocolate. Like those delightful tubs of chocolate-covered almonds and raisins and the popular bags of S'Mores Clusters? And what will happen to the food court chocolate chip cookies? Or the several muffin varieties featuring chocolate chunks? Some shoppers have already noticed a difference in the chocolatey flavor, which just doesn't seem quite right.
"I bought a pack of chocolate muffins last week after not buying them for a month or two and they tasted different than usual. Does anybody know if they are using different chocolate in them now?" one shopper wrote of the Double Chocolate Muffins.
It remains to be seen how Costco handles this chocolate-pricing conundrum!
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