Warehouse clubs benefits by offering good value for money to Canadian consumers. The ability to buy in bulk became even more appealing during the Coronavirus (COVID-19) pandemic; to regular subscribers and others encouraged to join a club during the lockdown.
Warehouse clubs performed strongly during COVID-19, as consumers stockpiled goods to limit trips outside the home and ensure they were covered as they spent more time at home. Even though consumers reduced the frequency of their trips to warehouse clubs during the pandemic, they tended to purchase more groceries per trip.
Costco continued to dominate warehouse clubs in 2021, with strong store sales as well as surging online grocery sales. Costco very effectively improved its delivery platform by partnering Instacart, which enabled the leading player to use the same-day delivery of groceries as a leverage to attract consumers.
After withstanding COVID-19 challenges better than many store-based and non-store retailers in 2020, warehouse clubs continued to perform well in 2021. The channel is projected to see positive growth in retail value (constant 2021 prices) sales, number of outlets and selling space through the forecast period.
There is not expected to be a major threat to Costco’s dominance of the warehouse clubs landscape in the forecast period. Costco has very little competition within warehouse clubs in Canada, dominating retail value share.
Digital platforms and services, not least home delivery, are expected to be very important for the further development and growth of warehouse clubs in Canada. Members are increasingly demanding better services like free shipping and fast delivery, and key retailers like Costco are set to improve their services to address these growing demands.
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Warehouse clubs are chained outlets that sell a wide variety of merchandise, typically situated in out-of-town locations, with a selling space of over 2,500 sq metres (and invariably over 4,000 sq metres in total size). Customers have to pay an annual membership fee in order to shop. The clubs are able to keep prices low due to the no-frills format of the stores and large volume SKUs. Example brands include Costco, Sam’s Club (Walmart), and Atacadão. Excludes sales attributable to membership fees and business-to-business sales. Also excludes cash & carry and warehouse outlets (which are typically oriented towards businesses, rather than consumers). Note: Local variants, such as atacarejos in Brazil, are included in this channel.See All of Our Definitions
This report originates from Passport, our Warehouse Clubs research and analysis database.
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