Liquor stores first for chain's Alberta holdings

Warehouse grocery giant Costco is serving up something new in Alberta: Liquor and wine.

The chain of membership warehouses, operating under the Costco Wholesale banner, is in expansion mode and opening two new stores, one in Strathcona County just east of Edmonton and another in northwest Calgary.

The Strathcona County Costco, at 142,000 square feet, will include an adjacent but separate liquor operation. Opened at the end of March, it's located at Broadmoor Blvd. near Broadway Blvd. and is slightly smaller than its new 148,000-sq.-ft. Calgary cousin.

The Calgary Costco, at 11588 Sarcee Trail, also opened its doors on March 30 and includes liquor sales separated from the main warehouse operation to meet Alberta Gaming and Liquor Commission policy. Shoppers will not be able to walk into either liquor unit from the main store.

Photo courtesy of Costco
The Strathcona County Costco, forefront left, will include a separate liquor operation.

Costco officials say the stores will offer their traditional variety of brand-name merchandise to its members.

"Each of these locations will offer our full complement of services," says Robin Ross, Costco's regional marketing manager for Western Canada, noting that the openings will mark Costco's ninth and 10th locations in the province.

"It will be our third location in the Calgary market, where we opened our first (store) in August of 1986. This will be our fourth location in the Greater Edmonton market, where we opened our first in November of 1985."

Both stores, however, are not Costco's largest.

"Our (recently moved and new) South Edmonton location is the largest template of any locations that we have opened in Canada in the last five years," adds Ross.

He would not comment on whether Costco will roll out liquor operations at any other of its Alberta stores. Calgary Co-op, Safeway and the Real Canadian Superstore already operate standalone liquor stores in Alberta.

For Strathcona County officials, landing a Costco and being the first one in the store's chain to sell hard liquor was a coup. Costco already sells beer and wine at its Quebec stores.

Gerry Gabinet, manager of economic development and tourism for the county, says it is now in a different league when it comes to attracting retailers.

"That means when people are looking for retail locations, they're looking at a market draw area of around 200,000 to 250,000 people," he says. "This will enable us to access other retailers such as Future Shop, A&B Sound and those types of chains."

Gabinet also says the Costco opening is having a positive effect for owners of land along Broadmoor Blvd. and the nearby Baseline Road.

"Now that you've got a Costco down there, the price of land will probably be increasing," he says.

The price for serviced commercial land is somewhere between $250,000 and $400,000 per acre along that particular area, he adds.

"Prior to Costco coming into the picture ... you were looking at an average price of around $200,000 and $250,000, so that's had a real good upside for us in the particular community. So we're really, really happy that Costco has chosen our community to locate in," says Gabinet.

Also happy that Costco has chosen to expand in Calgary is Michael Brown, vice-president of business development and retention for Calgary Economic Development. "There is a definite market for Costco (to open a new store) in Calgary," said Brown. "There is a high level of discretionary spending due to the city's lower cost of living and we have the highest income level in Canada at $40,021 per capita."

Costco's Ross says it's hard to predict the exact number of net jobs that will be gained from the new stores, but believes it will likely mean an additional 500 employees.

He says Alberta remains a very attractive marketplace for future expansion.

"We are continually reviewing where it makes sense for us to do business and whether Costco will be a good fit in the market," he adds.

(Laura Severs can be reached at laura@businessedge.ca)