This is often very noticeable because Costco primarily carries name brands. For example, purchasing the large cases of soda at Costco is cheaper than buying the same brand at a grocer, but appreciably more expensive than buying the grocer's store brand. Costco hasn't built their reputation necessarily on being the cheapest, but also on carrying quality brands, so they are often not the cheapest if you compare across brands. This is particularly clear for products like soda where it's not that certain that the name brand is actually any better.
On the other hand, there's the Costco store brand, "Kirkland Signature". On the other, other hand, Kirkland Signature is a fairly premium store brand, if that makes any sense--there are some products where I trust Kirkland Signature as much if not more than many name brands, similarly to Trader Joe's.
Also,
> This is particularly clear for products like soda where it's not that certain that the name brand is actually any better.
This hasn't been true in my experience. A lot of soda drinkers have very strong preferences not just between brand to brand (Coke vs. Pepsi) but even within the same brand (Mexican vs. US Coke). About the only time I'd buy any store brand soda would be if (a) I was serving it to people and didn't particularly care how much they enjoyed it or (b) if I was buying it for some non-drinking purpose.
Definitely the products are different - I say that because there are a lot of people, at least in my experience, who prefer an off-brand. RC is somewhat famous for being a discount soda with a strong following. Given the number of people who have a strong preference between name-brands Coca Cola and Pepsi, if they squared those against the few dozen off-brands would there be another they preferred? In another market space Coca Cola and Pepsi are now the underdog fighting back against National Beverage, a discount manufacturer which managed to sweep the market with their La Croix brand. At the same time their Shasta brand still runs fifty cents a can at the right vending machine and in my opinion isn't that bad. Coca-Cola tends to be better regarded than Pepsi due to their history, while Pepsi more often wins blind comparisons. This consumer preference is famously reversed in the soviet bloc. At the same time Coca Cola's Mr. Pibb is decidedly "off-brand" compared to the smaller Dr Pepper-Snapple group.
So I think it's hard to say that there's a clear quality hierarchy with sodas. Rather, they drive strong consumer preference and two brands happen to be the best known and most widely distributed. This is more or less true of a lot of other products as well where there isn't a clear objective measure of quality, it just seems especially noticeable with sodas.
In reality, customer preference is the only “clear objective measure of quality” that matters. You and I will have different opinions, and those opinions will motivate our purchasing decisions, and only once everyone’s opinions are priced in does the market deliver a verdict. And the most parsimonious reading of that verdict I can offer is simply: Coke and Shasta are two completely different products.
Incidentally, Russians drink Pepsi because the Pepsi company bartered distribution rights to the Soviet Union in exchange for the US distribution rights to Stolnichnaya vodka. After the Cold War ended they renegotiated and the Russians threw in a bunch of old naval ships and submarines—for scrap value, but still.
