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Costco raises membership fees in Canada and US, implements stricter access controls

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Retail Insider
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Costco Anjou Business Centre
Costco Anjou Business Centre (Image: Costco)

This week US-based multinational membership-only wholesale retailer Costco implemented its first membership fee increase since 2017 for Canadian and U.S. customers. This move comes alongside new measures to prevent non-members from accessing its warehouses.

The company revealed in July that annual membership fees would rise by $5 to $65 for three of its plans: “Gold Star,” “Business,” and “Business Add-On.” These changes took effect for new members signing up on or after September 1 and for renewals occurring after that date.

Costco’s premium “Executive Membership” also saw a price hike, increasing by $10 to $130 annually. However, Executive members will soon benefit from an increased annual reward cap of $1,250, up from the current $1,000 limit.

The fee increase is expected to impact approximately 52 million memberships, with Executive members accounting for slightly more than half of this figure. Costco has long relied on membership fees as a significant profit generator, using this revenue to offset expenses and maintain competitive pricing.

In the previous fiscal year, Costco’s membership fee revenue reached US$4.6 billion, marking an 8% increase from 2022. This substantial income stream plays a crucial role in the company’s business model, allowing it to offer competitive prices on a wide range of products.

Alongside the fee increases, Costco is implementing stricter access controls to curb membership sharing. The company plans to introduce membership scanning devices at warehouse entrances, requiring all members to scan their physical or digital membership cards before entry.

“Over the coming months, membership scanning devices will be used at the entrance door of your local warehouse,” Costco stated. This new policy aims to ensure that only valid members and their guests can access Costco’s facilities.

For members whose cards lack a photo, Costco advises bringing a valid photo ID. The company says it encourages these members to visit the membership counter to have their photo taken, streamlining future visits.

Additionally, Costco now requires all guests to be accompanied by a valid cardholder when entering its stores. This measure is designed to prevent non-members from using membership cards that don’t belong to them.

As of September 2024, Costco operates a vast network of 884 warehouses globally. This includes 611 locations in the United States and Puerto Rico, and 108 in Canada — representing a higher penetration of stores per capita. The company’s international presence spans several countries, including:

  • 40 warehouses in Mexico
  • 33 in Japan
  • 29 in the United Kingdom
  • 18 in Korea
  • 15 in Australia
  • 14 in Taiwan
  • 7 in China
  • 4 in Spain
  • 2 in France
  • 1 each in Iceland, New Zealand, and Sweden

Costco’s e-commerce operations complement its physical presence, with online platforms serving customers in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan, and Australia.

VIDEO: Ontario alcohol sales in convenience stores

By
Mario Toneguzzi
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Bruce Winder, a retail analyst, discusses the launch in Ontario on Thursday September 5 in convenience stores.

Bruce Winder

Sales of alcohol will be launched in Ontario grocery stores on October 31 this year.

Winder says the move will be a disruptor offering consumers convenience but with a limited assortment.

The question is going to be what the price of alcohol will be.

For grocery stores, the margins for alcohol are not high and as of January bigger grocery stores will have to add a return element to their locations.

Winder says the consumer response is mixed right now as other provinces like Quebec have been doing it for a long time. Some negative responses include what it means for residential neighbourhoods as well as social concerns over drinking.

The following is a statement from Anne Kothawala, President and CEO of the Convenience Industry Council of Canada, on the launch of beverage alcohol sales in convenience stores:

“Today is a milestone for consumers and convenience stores in the province of Ontario. It marks the end of antiquated, prohibition-era rules that have precluded the province’s 7,500 convenience stores from responsibly retailing beverage alcohol.

“Allowing beer, wine, and coolers to be sold in our stores will create new revenue streams for our local businesses and meet customer demands in an increasingly competitive marketplace. It will also give thousands of Ontario retailers and producers opportunities to secure and grow their businesses. According to economic research prepared for CICC by Cascadia Partners, expansion will result in an additional 9,300 new jobs in the province. It is a true win-win-win: for convenience stores, for local producers, and for consumers.

“We commend Premier Doug Ford and Minister Peter Bethlenfalvy for working with CICC closely and delivering on their commitment to increase both convenience and choice to Ontarians.

“Today is just the start. There are still issues that need to be addressed to ensure the retail framework works for everyone. As the voice of convenience stores in Ontario, we will continue to work with the government to provide our industry expertise moving forward to address our concerns around pricing and distribution.”

The Convenience Industry Council of Canada (CICC) is the voice of Ontario’s convenience industry and represents 7,500 retailers in Ontario that generate $16.8 billion in annual sales, employ 65,700 Ontarians and collect $4.3 billion annually in taxes for the provincial government.

KITS Eyecare Boosts Q3 Revenue Outlook

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Retail Insider
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Kits at Yew and Cornwall in Vancouver, BC (Image: Kits.ca)

Vertically integrated Vancouver-based KITS Eyecare Ltd. has announced an upward revision to its Q3 2024 revenue guidance. The Toronto Stock Exchange-listed company (TSX: KITS) now expects to surpass its previously projected range of $39 million to $41 million.

The revised outlook anticipates a year-over-year growth rate exceeding 32%. The adjustment comes on the heels of a record-breaking week of ordered sales, totalling approximately $3.5 million for the week ending August 31, 2024. Notably, KITS achieved record sales in Canada during this period, significantly boosting confidence in the company’s Q3 performance.

Initially, KITS had provided a Q3 2024 revenue guidance range of $39 million to $41 million in its Q2 earnings release. However, as the quarter draws to a close, stronger-than-expected demand and improved performance have prompted management to revise the outlook upwards. 

While revenue projections have been adjusted, the company maintains its outlook for Adjusted EBITDA as a percentage of revenue between 3% and 5%. The stability in profitability expectations alongside increased revenue forecasts suggests effective cost management and operational efficiency.

KITS’ upward revision aligns with its strategy to deliver consistent growth and operational excellence. 

KITS operates as a digital-first eyecare brand, offering customers a vast selection of contact lenses and eyeglasses. The company’s product range includes exclusive KITS-designed items and leverages a robust suite of online vision tools. By employing an efficient digital platform backed by industry-leading manufacturing capabilities, KITS can offer competitive prices and personalized products to Canadian consumers.

The company’s focus on innovation is evident in its pursuit of cutting-edge technologies. KITS continually develops and implements online eyewear fitting tools and virtual try-on features for glasses.

KITS’ primary market is currently Canada, and the company’s growth strategy and digital-first approach positions it for potential expansion. KITS’ performance in Canada may serve as a benchmark for similar ventures in other markets.

Related news: Vancouver-Based Eyewear Company KITS Sees Record-Breaking Increase in Production Despite Intense Competition [Interview]

Hillcrest Mall celebrates 50 years as a community gathering place in Richmond Hill

By
Mario Toneguzzi
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Hillcrest Mall in Richmond Hill, Ontario. Photo: Oxford Properties

Hillcrest Mall has been the heart of Richmond Hill’s flourishing community for the past 50 years. 

Recently the shopping centre celebrated that milestone as it has developed over the years into an important community gathering destination for local residents.

Ryan Da Silva

“In 1974, we opened as the largest mall north of metro Toronto and for the past 50 years, Hillcrest Mall has stood as a cornerstone of Richmond Hill, evolving and growing alongside the city. Since then, we’ve seen tremendous growth including an HBC renovation and redevelopments of our South and North Wings, bringing popular brands like H&M, Indigo and Sporting Life closer to our community,” said Ryan Da Silva, Hillcrest Mall’s Director and General Manager.

Hillcrest is a regional shopping centre which features a mix of 120+ fashion, lifestyle and food retailers. Strategically located in the heart of Richmond Hill, the shopping centre provides an unparalleled opportunity to capitalize on the region’s lucrative economy and growing affluent

population, says the mall which is about 585,000 square feet.

Sought-after brands including Sporting Life, Indigo, HomeSense/Marshalls, West Coast Kids, H&M, Hudson’s Bay, lululemon, Aritzia and Sephora continue to highlight Hillcrest as a shopping destination in York Region.

 

Photo courtesy of Hillcrest Mall
Hudson’s Bay department store at Hillcrest Mall in Richmond Hill, Ontario. Photo: Oxford Properties

Hillcrest is co-owned by Oxford Properties and Montez Corp and managed by Oxford Properties Group.

Oxford Properties Group is a leading global real estate investor, asset manager and business builder. It builds, buys, and grows defined real estate operating business with world-class management teams. Established in 1960, Oxford and its portfolio companies manage approximately C$82 billion of assets across four continents on behalf of their investment partners.

Oxford’s owned portfolio encompasses office, logistics, retail, multifamily residential, life sciences, hotels and credit in global gateway cities and high-growth hubs. Oxford is owned by OMERS, the Canadian defined benefit pension plan for Ontario’s municipal employees.

Opening day. Photo courtesy of Hillcrest Mall

In August, Hillcrest Mall celebrated its 50th anniversary with a number of activities, a back-to-school fundraising initiative and made a $5,000 contribution to Sandgate Women’s Shelter in York Region.

Hillcrest Mall was decked out with gallery timeline walls, a large gold 50 installation and a Rose Photo Wall paying homage to Richmond Hill’s reputation as the rose capital of Canada. From August 1 to 25, guests were invited to donate backpacks filled with supplies, clothing and toiletries near Guest Experience Desk to help the families of Sandgate Women’s Shelter.

Da Silva said Hillcrest was the largest mall north of metro Toronto and “for the past 50 years Hillcrest has stood as a cornerstone of Richmond Hill.”

“It continues to evolve and expand in a growing city,” he said, adding that mall occupancy is about 97 per cent. “The mall is bustling. Quite busy.”

Da Silva said some of the newer retailers in the past year or so include a new lululemon store, Gatsby Studio Salon & Spa, Ramona’s Kitchen.

Island Way Sorbet is coming.

Photo courtesy of Hillcrest Mall

“We have a lot in the works,” he said. “We have a few more but nothing we can name at this time . . . Our most recent expansion was our north expansion which included Marshalls, Mark’s, Indigo and Old Navy.

“We continue to invest at Hillcrest Mall and we’re currently looking at adding residential. That would definitely complement our shopping centre and the density surrounding the shopping centre which would work hand in hand in terms of shopping and a live, work, play element.

“The mall continues to evolve based on market conditions and we look to add various elements. Food and beverage. We continue to look at it which drives traffic to the shopping centre. We have a lot of great retailers including Sporting Life, SportChek, Marshalls, HomeSense. All the staples that you would need and find in a shopping centre.

“We continue to work with the city of Richmond Hill. We’re still making progress on obtaining municipal approvals and that would be for a proposed 588-unit purpose built rental. Two towers – 26 and 30 storey towers.”

He said the former TD location along Yonge Street will have two new restaurants in the future – 7,000 square feet added to the mall.

Canada’s EV Tariffs Spark Chinese Retaliation, Threatening Canola Exports [Op-Ed]

By
Sylvain Charlebois
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Image illustrating the tension between Canada imposing tariffs on Chinese electric vehicles and China's retaliation on Canadian canola.

Canada’s decision to impose tariffs on Chinese electric vehicles (EVs) last week was a predictable move. Ottawa fully anticipated retaliation, which came swiftly as China announced an anti-dumping investigation into Canadian canola exports. While there is no evidence of actual dumping, the facts are largely irrelevant in this case. China will proceed with sanctions regardless of the explanations provided by the Canola Council or Canadian diplomatic channels. Much like in 2019, when Canada faced a similar impasse, we could see borders close again for Canadian agricultural exports.

In March 2019, after the arrest of Meng Wanzhou in the Huawei incident, China abruptly halted Canadian canola shipments, citing pest contamination as the official reason. The Canadian canola industry suffered losses estimated between $1.54 billion and $2.35 billion in sales, with price declines persisting until August 2020 due to the suspended export licenses. Pork exports were also affected, but canola has always been a primary target for China in these diplomatic standoffs.

Canola holds a special place in Canada’s agricultural identity, and targeting it first is a calculated move by China. The crop was developed in Canada, and its very name—derived from “Canada” and “ola” (referring to oil low in acid)—underscores its deep national significance. As the world’s largest exporter of canola, Canada plays a pivotal role in both global food markets and biofuel production. Conversely, China is the largest oilseed importer, with half of Canada’s canola exports destined for its market. By hitting canola, China sends a clear message: it can disrupt a key Canadian sector anytime political tensions escalate.

Farmers in Alberta, Saskatchewan, and Manitoba—where the vast majority of Canada’s 43,000 canola producers are located—are already feeling the impact. Yesterday, canola prices dropped nearly 5%, and further declines could mirror the prolonged downturn of 2019. The symbolism of canola makes it a prime target. Whenever Canada moves against China’s interests, Canadian agricultural commodities such as canola are the first to be leveraged.

Western Canadian farmers now face significant uncertainty, largely a result of Ottawa’s aggressive push to bolster the battery and EV sectors. The federal government has committed nearly $50 billion toward building battery factories, a bold gamble that led to the imposition of tariffs on Chinese EVs. The official rationale, it seems, is to protect domestic manufacturers from an influx of cheaper green vehicles from China, even if that means limiting affordable options for Canadian consumers and straining relations with China. This approach prioritizes the development of Canadian-made EVs over the potential benefits of allowing lower-cost imports to help reduce carbon emissions.

This industrial strategy follows a familiar pattern: when a government decides that a product must be produced domestically, at all costs, it often results in less competition, higher prices, and questionable product quality. The dairy industry offers a prime example. Ottawa has funneled billions into the sector, supported by highly restrictive trade barriers. While this policy has propped up dairy farmers, it has done so at the expense of other agricultural sectors—wheat, canola, beef, and pork—all of which could arguably benefit from the same level of government support.

In the end, the federal government will likely compensate canola farmers for their losses, as it has done before. Farmers are resilient, but Canada’s diplomatic standing, particularly with China, continues to erode.

For those old enough to remember, Pierre Trudeau once idealized China, yet today his son Justin Trudeau faces a more hostile Beijing. History, it seems, has a twisted sense of irony.

Related: Where are Food Prices in Canada Headed in 2024? [Sylvain Charlebois Video Interview]

Michael Hill Jewellers Sees Revenue Growth in Canada, Australia

By
Retail Insider
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New Michael Hill 'New Era' store design concept. Renderings provided by Michael Hill International

Jewellery retailer Michael Hill has announced a revenue increase for the past fiscal year. The company’s success is notable in its Canadian and Australian markets.

The jeweller saw its overall revenue climb by 4.2 percent, reaching A$644.9 million – the Australian retailer reports in its local currency. The growth was primarily driven by strong performances in Canada and Australia.

In Canada, Michael Hill’s retail segment experienced a modest but positive growth. Revenue in the market increased by 0.6 percent, amounting to C$157.1 million. The company currently operates 85 stores across Canada.

The Australian market saw a substantial 10.3 percent increase in revenue, totaling A$359.1 million. With 171 stores in Australia, it remains the company’s largest market.

The New Zealand retail segment experienced a decline of 11.8 percent, with revenue falling to NZ$114.8 million. Michael Hill has 44 stores in New Zealand.

Daniel Bracken, Michael Hill’s Managing Director and CEO, highlighted several strategic initiatives undertaken during the year. He noted that the retailer has refreshed the Michael Hill brand to support its premium market positioning. He also noted the expansion and integration of the newly acquired Bevilles brand, which caters to the value segment of the fine jewellery market.

Sustainability has also been a key focus for Michael Hill. The company launched its Re:new Ecosystem, which includes gold recycling and jewellery repair services. Additionally, the Michael Hill Foundation was established, further demonstrating the company’s commitment to corporate social responsibility.

The company has reported encouraging early results for the current fiscal year. In the first eight weeks, group sales increased by 3.2 percent compared to the same period last year. Australia and Canada continued their upward trajectory, with sales growth of 5 percent and 4 percent respectively. However, New Zealand saw a further decline of 6.2 percent.

As part of a rebrand, Michael Hill will be selectively renovating stores beginning in key markets. In Canada, that includes refreshed flagship concepts in Toronto and Vancouver, with details to follow. 

Canadian Retail News From Around The Web For September 4, 2024

By
Retail Insider
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Canadian Retail News From Around The Web

News at a Glance

Retail Insider is streamlining its Canadian retail news from around the web to include a handful of top news stories that can be viewed quickly during the day. Here are the top stories from the past 24 hours.

‘Race for space’ squeezes retailers amid rising rents (Globe & Mail)

These grocery items have become cheaper, according to a new analysis (CTV)

Alcohol can be sold at Ontario convenience stores this week (CityNews)

‘New chapter’: The Beer Store begins selling snacks and energy drinks from Frito Lay, Old Dutch, Red Bull and other brands (Toronto.com)

Matt Elliott: With a lot of pot shops going up in smoke, city hall needs a new plan for vacant storefronts (Toronto Star)

Luxury shopping? Lifestyle destination? This is what it’s like inside Montreal’s newest supermall Royalmount (CBC)

Final Designs Released For First Phase Of Cloverdale Mall Redevelopment (Storeys)

Parkland looks to sell its retail and commercial businesses in Florida (Calgary Herald)

Banff-Based Ramen Arashi Opening in Kensington Area of Calgary

By
Mario Toneguzzi
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Nobu Togawa and Ramen Arashi banner (CNW Group/Arashi Dining Group Ltd.)

The fifth location of the renowned Ramen Arashi is set to open its doors in the bustling Kensington area of Calgary on September 24.

The brand said this latest addition will bring the authentic taste of Japanese ramen to the heart of Calgary, continuing the tradition started by founders Kentaro Seki and Yuji Yokomori in 2017.

Photo courtesy of Ramen Arashi
Photo courtesy of Ramen Arashi

“Ramen Arashi isn’t just about food; it’s about creating a community hub where people from all walks of life can come together to enjoy a hot bowl of ramen,” said Nobu Togawa, a Tokyo-born Ramen Master, sports enthusiast, and now General Manager and Head Chef at the new location.

“After winning the hearts of diners in Banff, Canmore, Victoria, and most recently Kelowna, Ramen Arashi looks to replicate its culinary success and endearing atmosphere in the vibrant community of Kensington. Local residents and visitors will soon revel in a dining experience that is more than just about ramen; it’s about community and culture,” said the brand.

The company said the expansion reinforces Ramen Arashi’s mission to offer the genuine essence of ramen as a cultural emblem of Japan, honed with every bowl served.

Photo courtesy of Ramen Arashi

“With its inception in Banff, the brand has established itself as a culinary beacon of authentic Japanese cuisine. Each location has garnered a strong following, not only for the quality of the food but also for the restaurant’s commitment to embodying Japanese hospitality and authentic ramen culture,” it said.

“The choice of location was harmonious with Ramen Arashi’s ethos. The Kensington district, known for its eclectic and adventurous spirit, is the perfect backdrop for a brand that prides itself on being an integral part of the community it serves. The opening is a significant step for Ramen Arashi, aligning with its continued popularity and reputation for bringing a piece of Japan to the Canadian culinary landscape.

Photo courtesy of Ramen Arashi

JYSK set to open renovated store in Coquitlam, B.C. (Photos)

By
Mario Toneguzzi
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Photo courtesy of JYSK

JYSK, the international retailer of Scandinavian home furnishings and one of the world’s fastest growing retailers with more than 3,500 stores in 48 countries, has renovated its store in Coquitlam, B.C., at 15 King Edward Street at United Boulevard.

The company said customers will have a brand-new shopping experience with the new JYSK 3.0 store.

The grand re-opening event is set for September 7.

“In this new look store you get easy shopping for home furnishing décor with Scandinavian design and great offers every week,” it said.

Thomas Sagmoen

“We’ve been working hard to offer a unique shopping experience,” said District Manager Thomas Sagmoen. “While providing excellent service and reliable quality, we enjoy helping customers with our product knowledge and expertise. This new store offers our customers a great new layout with JYSK products set up and displayed, as you would like to see them in your own home. “

The retailer said customers can discover stylish furniture, cozy bedding, and home accessories—everything you need to elevate your home!

“JYSK is set apart by its Scandinavian-inspired designs that are appealing for their modern simplicity and the low prices. A full range of products is also available at JYSK.ca and picked up at your local store or shipped to most addresses in Canada,” it said.

Ludvik G Kristjansson

In 1996, JYSK opened its first Canadian store in Coquitlam, BC, and today there are over 68 stores across the country.

“We are excited to be celebrating 28 years in Canada and bringing Scandinavian influence to the Canadian market,” added CEO Ludvik G Kristjansson.

Photo courtesy of JYSK
Photo courtesy of JYSK
Photo courtesy of JYSK

Diptyque Expanding in Canada with Stores

By
Craig Patterson
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Diptyque at CF Pacific Centre in Vancouver. Photo: Lee Rivett

Upscale French fragrance and candle brand Diptyque launched a store expansion in Canada over the summer, after entering the country with its first location in Toronto in 2022. The brand opened a location in Vancouver last month and this week will open a shop-in-shop at Rennaï in Montreal as well. 

Diptyque began its Canadian expansion when it opened its first store at Toronto’s Yorkdale Shopping Centre in the fall of 2022. A second opened last summer at 101 Yorkville Avenue in downtown Toronto’s Yorkville area. 

The brand expanded outside of Toronto for the first time last month, when it opened a store at CF Pacific Centre in Vancouver. A Diptyque shop-in-store will open this week in Montreal at Royalmount, in partnership with multibrand retailer Rennaï. 

Diptyque at CF Pacific Centre in Vancouver. Photo: Lee Rivett
Diptyque at CF Pacific Centre in Vancouver. Photo: Lee Rivett

A fourth Canadian Diptyque store is currently under construction at CF Sherway Gardens in Toronto, and it is scheduled to open in October of this year. A fifth will open next year at Oakridge Park in Vancouver, according to the brand. Stores for Montreal and Calgary are also planned in 2025-2026, along with further expansion in the Vancouver and Toronto markets.

The CF Pacific Centre Diptyque spans 935 square feet and is located in a retail space formerly occupied by defunct retailer Siba Jewellers. Vancouver-based Cutler was the architect and project manager for the store, which included producing the required architecture drawings, managing mechanical and electrical engineering, managing landlord reviews, managing the building permit process, managing the general contractor tender process, and provided construction administration services. The store’s interior design was executed internally by Diptyque. 

Jeff Berkowitz of Aurora Realty Consultants negotiated leases on behalf of Diptyque. Ideal Diptyque retail spaces could be in malls and on streets with locations ideally being in the 600-1,000 square foot range.

Diptyque at the Yorkdale Shopping Centre in Toronto, September 1, 2024. Photo: Craig Patterson
Diptyque at 101 Yorkville Avenue in Toronto. Photo: Diptyque

Diptyque was founded in 1961 by interior designer Christiane Gautrot, theatre set designer Yves Coueslant, and Desmond Knox-Leet, a painter. The brand, which sells fragrances, candles & home, skincare, and home decor, has stores globally as well as distribution in upscale retailers. 

Candles are typically priced in the $50-$100 range depending on size, with some more expensive ones exceeding $500. Diptyque fragrances are typically well over $100 and a room spray was priced at $80 on a Canadian retailer’s website.

Diptyque shop-in-store at Royalmount, under construction — photo from a construction worker on-site.

In the United States, Diptyque has 30 stores in major markets with a mix of street and mall stores in upscale locations. Some stores are on luxury streets while others are located a bit off the beaten path in trendy places close to affluent population areas. 

The Diptyque brand was introduced to Canada via wholesale channels, with retailers such as Holt Renfrew and Saks Fifth Avenue carrying the brand in Canadian stores. The multi-brand retailers are expected to retain distribution despite the direct-to-consumer brick-and-mortar expansion.

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