I definitely do routine shopping there. I still need to go to Safeway sometimes to pick up a quick odd or end, but anything that I have time to plan, I buy at Costco.
People complaining about Costco being "too expensive" aren't using their heads, or aren't looking for a quality product in the first place. The thing is that Costco mostly only carries high-quality brands (or high-quality/re-labeled "house brand") stuff. So yeah, if you don't mind buying Safeway brand cereal, AND you wait for a sale, then maybe you can beat the Costco price on Cheerios by a few cents. But you still have to eat crappy fake cereal instead of the real thing, and you have to do a lot of planning and little trips to the store to get the sales instead of only one trip every now and then.
Costco lets you use coupons, just like any other store, and they print their own coupons on top of that. I challenge anyone to find a lower price on things like Zip-Lock baggies than Costco with their regular-basis Zip-Lock coupon. They are practically free, and, again, manufacturer coupons still work on top of that.
Plus, their stuff generally has much later sell-by dates. For instance, you might have to buy two gallons of milk instead of one, but the sell-by date is 3 weeks later than at Safeway, AND the milk tastes WAY better than anything you'll find at Safeway (maybe because it's so much fresher!). I would buy Costco milk even if it cost more than the stuff at Safeway, because it is so much better. Yet Costco milk actually costs about 50% less than typical Safeway prices.
A big block of Tillamook cheese might be more than you were planning on buying, but at 50% the Safeway price (and 15% lower than even Safeway's sale prices), anything you eat past half the block is pure savings. That's pretty much the deal with everything in the store. You make a purchase knowing that it is more than you "need" right now, but that you won't have to buy it again for so much longer that you come out way ahead in the long run. And don't forget the wonders of the freezer. You will not find better prices on meat or fish, the quality is better than Safeway, and meat freezes very well. The only better bet on something like salmon is your local asian grocery, where the salmon is still live.
Their prices on gasoline, televisions, memory-foam mattresses, and other non-grocery items are also tough to beat, even when other stores have "sales."
I buy a lot of gas, which adds up, but I'd estimate my fiance and I save at least $100 a month by shopping at Costco, and we're enjoying higher-quality products than we normally would have. Going to a Costco store is like walking into the gates of hell, but if I can save money and increase my standard of living, it's a no-brainer.