Costco Canada has opened its first Business Centre as it embarks on a more aggressive opening plan this year.
First launch of the format outside of the US
The Costco Business Centre format was launched in the US over 25 years ago. However, the concept has grown at a relatively slow pace with 15 sites currently trading in the country. The launch in Canada is the first time that the format is being tested internationally; its success could pave the way for it in other Costco markets. This opening forms part of a more aggressive expansion plan in Canada this year, with seven new locations planned.
Targeting small to medium sized businesses
The Business Centre format focuses exclusively on the needs of small to medium sized businesses. This includes restaurants, convenience stores and professional services such as doctors’ offices. Operating with a slightly smaller footprint than the core format, it does not offer services such as optical, bakery and butchery, while clothing, toys and sporting goods are not sold. Ranges include equipment and appliances, restaurant supplies, cleaning products and grocery items, with the majority of the latter sold in case pack sizes. The format also opens earlier than a typical Costco and offers a next-day delivery service. Any Costco member can shop at this location; 80% of the ranges are exclusive to the Business Centre.
Potential for 10-15 outlets in Canada
This format will compete with Loblaw’s Wholesale Club format. This has grown to a chain of over 50 stores, with national coverage across Canada. One of the core differences versus Costco is that it does not charge a membership fee. It also offers a broader range of grocery items. While there are no plans currently to open additional Business Centres in Canada, the country could potentially support up to 10-15 locations based on the opportunity it sees in the US for 40-50 stores.
| Stewart Samuel, Program Director, IGD Canada|
Based in Canada, Stewart heads up all of IGD's research and coverage on Costco globally. He is also responsible for shaping IGD's research program across North America. Contact Stewart at email@example.com for further insight on the region.