Costco vs. LoblawsIn this paper, I shall be providing my personal observations between shopping in a traditional retail store, Loblaws, versus that of a box store, Costco/Club Price. During the last ten years, the overall nature of retailing has changed significantly. There are now an increased number of mass merchandisers such as Costco, who are changing the outlook of retailing at the expense of traditional grocery stores such as Loblaws. There are a number of reasons why a consumer would choose a specific retail store over the wide selection of competitors out there on the market, those being; inventory, selection, variety, quality, pricing strategy, in store merchandising, promotions, advertisements, personal selling, customer services, credit and additional services. Since the market is fierce, it is important for the retail stores to fully understand what are the specific needs of their customers. Due to the fact that there is a retail industry increase of large discount/box stores, indicates that the needs and values of consumers are changing.If I examine the structure of the mass merchandiser Costco/Club Price, it is easy to state that their setup is targeted at for personal, family, household, and small business use. Essentially, their structure is similar to that of a warehouse outlet because of its cash and carry policy, discount prices and size. They are also able to carry brand name products at discount prices because of their large buying power, which allows them to purchase high volumes. They also are unique in the fact that their manufacturers provide their products on pallets therefore cutting down on shelving and restocking time for their employees. The service people from the manufacturing companies also go from store to store and service them as well as delivering their products directly to each outlet. Costco combines both wholesaling and retailing functions in one operation. However, customers are required to pay a privilege membership fee on a yearly basis. As a Costco member myself, I find that the membership fee is well worth the expense because of the types of products and prices that they offer which I cannot find elsewhere. Most manufacturers will develop exclusive products specifically for Costco so that they don't compete with the other retailers.The only negative aspect of their operation is that because they have a 15-30 day product turn over time, sometimes their selection is limited and you don't know from one day to the next if they are going to have a specific product in stock or not. If you see it there one day you feel that you have to buy it immediately or it might not be there tomorrow.Loblaws, being are one of the largest retail chain grocery stores has a different setup than Costco. They are mostly targeted towards the personal, family and household users. Opposed to the no-frills, square box layout at Costco, Loblaws offers a more eye-pleasing layout. They display their products in a more eye-catching way, have more promotional and advertising expenditures and their customer service is above par. Unlike Costco, where you can hardly ever find an employee to help you, Loblaws prides itself and providing efficient and pleasant customer service. Although Costco does occasionally (several times a year) provide coupons or promotional items, they pale in comparison to Loblaws, who have weekly specials. Loblaws also carries their own brand named products. They offer the President's Choice product in practically every product category. These items are very profitable sellers and strive to be a good quality alternative to brand name products. Costco also has their own brand name, Kirkland, on items that sell increased quantities.The Loblaws organization also owns Provigo and Maxi stores. This way here, the organization can better serve all customers. Loblaws has a great variety of products, has a large amount of items on their shelves, but also tends to have higher prices. Their higher prices correspond to the marketed higher quality standards that they claim to have. Consumers don't seem to mind paying a higher price for increased quality. Maxi stores offer products in larger bulk or quantity, and have less variety and have average prices. Provigo, on the other hand, has a larger variety but decreased quantities and prices.Both Loblaws and Costco lease out store space to various retailers. Costco offers an independent Optometrist center, but they have no interest to run it themselves because it would be too labor intensive. However, in essence, Loblaws is not a traditional grocery store because they have added services, such as a pharmacy, photo lab, healthy foods section, and a dry cleaner, etc, to try and enhance the shopping experience and to better satisfy all their customers needs in one visit.
