Costco Just Became Canada’s Second Largest Retailer

Despite being a go-to for groceries and all things bulk, it seems like we, as shoppers, sometimes overlook the power of Costco.

The retail giant has quietly championed the fashion space, stepped up its beauty game, and has even carved out a position in travel.

And now Costco has cemented its position as Canada’s second largest retailer.

costco is canada's second largest retailer
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According to retail analyst Amar Singh, who spoke with Retail Insider, Costco has bumped Walmart out of its spot on the retail chain and now comes second after Loblaws as Canada’s top retailers. The positioning now sets Costco ahead of grocers like Metro and Sobeys, as well.

Amar Singh attributes the bulk retailer’s success to its growing grocery presence and ability to still delivering “on its true value hunt experience which Canadians love.”

Costco is really a competitor. And what we forecast is that it is going to widen its gap to Walmart in terms of revenue. It’s going to dwarf Walmart over the next five years as well.”

Amar Singh, senior analyst on retail and ecommerce for Canada with Kantar
costco is canada's second largest retailer
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Another reason for why Costco is Canada’s second largest retailer is its positioning strategy, which has been very calculated. Costco has focused on urban centres and the suburbs, making it easily accessible to most Canadians. “On a per capita basis, Costco has a higher penetration in Canada versus the U.S.,” Singh says.

Additionally, while Canadians are known to love a good bargain, they’re also after quality, and that’s exactly what Costco provides.

Canadians are somewhat more adventurous than other shoppers because we’re open to non-traditional brands. We’re opening to experimenting and “are not married to brands” so long as we’re still getting good quality and benefits from products we seek.

While Costco is no stranger to brands, with its Kirkland brand, it’s able to make good quality product with low margins, and its private label has become a big money maker.

Kirkland brand
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Memberships and membership renewals are also a big money driver.

Which is no surprise. The membership allows Costco to lower its margins on other items so that they can give value back to its members. Its gas stations and auto services also play a role in Costco’s attraction.

costco card
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This quarter, Costco’s net sales were $46.45 billion.

That’s an increase of 7% from the same period last year. Its net sales for the fiscal year were $149.35 billion, which was also a growth from its last fiscal year.

With sales on the rise, you can bet that we’ll continue to see more Costco locations and more value-driven, high-quality products in-stores — a win for Canadian Costco members!

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