This blog post will focus on which market does Winco supermarket targets by linking and commenting on Paul’s blog.
I agree with Paul that Winco is targeting Vancouverites other than US consumers. As Paul mentioned in his blog, many Vancouverite would shop in Bellingham because of the price and tax difference. As my personal experience, the price in Bellingham is indeed a lot cheap than the price in Vancouver. In addition, the tax rate is 8.6% and 12% respectively. This extra 3.4% in tax rate was able to justify the difference in exchange rate. Moreover, the gas in Bellingham is also cheaper than Vancouve. However, despite the benefits of shopping and gasing in Bellingham, there are still a lot of people not very interested in driving and shopping in Bellingham. The biggest reason is that it took a lot of time for a round trip, and there is no point of doing this when people are living alone or live in a house of two. Thus, to be more specific, I think Winco supermarket is targeting Vancouverite who have a family of four or more, and who are willing to spend a lot of time driving and shopping.
Although I agree with Paul that Winco supermarket is targeting Vancouverites, but I don’t think that Winco is going to snatch a great portion of the market from Costco for the following reasons. First, Winco and Costco are targeting different segments. For example, Costco is targeting people who has a small restaurant or who has a huge family that needs lots of same material at a time. These kinds of people would choose Costco over Winco because Costco would have a better deal than Winco. Second, although Winco have a comparative advantage for its hours of operation, but Costco on the other hand have a comparative advantage for people who purchase electronic goods in its store, because it provides two year extended warrantee to its customers. Last, Costco is a type of store which you can basically buy everything, but you cannot do that in Winco. So overall, I think Winco might steal some portion of Costco’s customer, but it will not a huge impact on the market share that Costco has.
