I don't know if this is how Costco itself thinks of it, but you can get to a pretty decent understanding of their financials by assuming they sell everything at cost and pocket the membership fees as profit. Their actual profits tend to be about 50% higher than that implies, but given the size of the rest of the business that means the membership fees are only about 2% of the revenue overall it's not a bad approximation.

They can twiddle with dropping a bit of price here and raising it somewhere else and still have the same ratio of cost.

Of course you can still think of things in terms of the cost per item versus the profit per item, but the stability of that ratio over many years makes me wonder if maybe Costco thinks of the membership fees that way.

Weird. Costco is never the cheapest price for Coke in my area. Or the previous state I lived in. At least if you bought during sales at competing Supermarkets.

Where they win my Diet Coke business is that they are consistently a "good deal" - never the cheapest, but never the most expensive. And I don't need to wait for a sale to stock up.

I still buy soda from the local grocery stores when I happen by a deal when shopping for other things. But I don't go out of my way. The specials are usually much better than Costco though. By 25% or more per can.

Honestly this goes for most things I buy at Costco. Even in bulk, their per-unit costs beat the standard pricing at competitors - but never the sale prices. It just removes mental overhead. And the bulk prices are always better at a restaurant supply store. Where Costco wins in this area is curation so I can reduce mental load, but then again Costco does the bullshit where they stock something for 6mo out of the year and you spend an extra 20 minutes searching the store for it the next time you need it only realizing they stopped selling it. Then it appears randomly a month later.

They are a decent middle ground for me. I can buy 10lbs of chicken breast of decent quality for $2.99/lb I can toss directly into the freezer pre-packaged into meal-sized portions. Or I can buy 40lb boxes of bulk chicken breast for $1.39/lb from the supply store and spend a couple hours vacuum packaging it myself.

I definitely have a love/hate relationship with the place! I see Costco as the upper middle class consumerism version of nerd sniping.