Costco returns to its roots with new outlets

Costco is launching a new store format in Canada in 2017 that hearkens back to its roots supplying small businesses.

The first Costco Wholesale Business Centre is scheduled to open in Scarborough in March.

“Sometimes we call it internally the Costco retro — we’re going back to our base, back to our roots,” said Marc-André Bally, vicepresident business centre for Costco Wholesale Canada.

While the new format is aimed at smallto-medium sized business owners, including restaurateurs, lawyers, doctors and gym owners, all card-carrying Costco members can shop the store, at no additional cost.

At 127,000 square feet, the business centre will be somewhat smaller than the 94 Costcos already operating across Canada. But because there will be no ancillary services — no optician, no bakery, no meat-cutting services — the number of pallets on the floor from which products are sold will be about the same as in a typical Costco, said Andrée Brien, senior vice-president and senior general merchandise manager for Costco Wholesale Canada.

Among the things customers won’t find for sale in the Costco Business Centre: diamonds, tires, apparel.

Still, at least 80 per cent of products will be unique to the new format, which will add an element of novelty for regular customers, said Bally. Many of the brands that will be sold from the new store will be from distributors that don’t typically sell at retail.

Another differentiator: While the business centre will sell fewer items, it will sell a greater variety of products within the categories it does carry.

“The categories that we are in, we’re very deep, so if it’s bottled water, you’re going to see several brands of bottled water,” said Bally. “It still remains attractive for somebody that has a big family or somebody that is organizing an event, either a barbecue or a soccer mom.”

The hours will also be geared to a business clientele — from 7 a.m. to 6 p.m. Monday to Friday to allow them to shop before opening their own businesses for the day. Saturday hours will be 7 a.m. to 4 p.m.

Existing Costco stores open later in the morning and are open in the evening.

The new model was introduced in the United States three years ago and has grown to 14 locations, including four opened last year and three opening this year.