Costco Canada Exec Says The Retailer Is 'A Different Option' With Low Prices That Save Money

Low prices at Costco warehouses in Canada make it "a different option" for shopping and that is actually a benefit for all Canadians, according to an executive with the wholesale retailer.

This was shared during an inquiry by the federal government that's questioning grocery store executives about food price inflation in Canada.

Pierre Riel, the executive vice president and chief operating officer of Costco Wholesale International, appeared before the standing committee on agriculture and agri-food on April 17, 2023.

Before being questioned by MPs, Riel gave background about Costco Canada including its mission, business model, prices and more.

"Our mission is to offer our members the best quality goods and services at the best possible prices," the executive said in French.

He shared that Costco's presence in this country gives people "a different option" when it comes to grocery shopping.

Riel said the unique business model the wholesaler has allows it to "offer a direct benefit" to people with a Costco membership through low prices.

Then, those low costs also provide a benefit to all Canadian consumers because they are competitive prices, he continued.

"At Costco, we focus on sales and strive to keep our costs low," Riel said.

"The final price our members pay for food is dependent on many factors at each stage of the supply chain which includes farmers, processors, distributors and retailers," he noted.

The executive mentioned that the price people pay for products is also affected by world events, labour shortages, government regulations and more.

"It is our role to keep prices low, this is what our members expect from us," Riel said.

"Let me be clear, Costco has not sought to increase its profits in light of the current challenges," he continued.

Lianne Rood, a Conservative MP for Ontario, said during the committee meeting that Riel's answers show Costco as "a stark contrast from the other big grocery stores."

Also, Bloc Québécois MP Yves Perron reiterated that the wholesale retailer is unlike the other grocery stores that have been questioned at the committee.

"Some of your responses are surprising because they are very different from what we've heard so far," Perron said.

Then, Riel gave insight into what's been going on with Costco recently as prices have increased at grocery stores across the country.

"In the last two years, the cost of merchandise has increased considerably but we have a role to play for our members," the executive said.

"At Costco, we're different than other grocery stores. We have 3,500 items and in other grocery stores, they have tens of thousands. The more you buy at Costco the more you'll be able to save," Riel continued.

Riel also shared that Costco will participate in the federal government's proposed grocery code of conduct if the goal of it "is to diminish costs for the consumers."

According to the government, the code of conduct is supposed to enhance "transparency, predictability and fair dealing" in the grocery industry and make the "food supply chain more resilient."

Before Riel represented Costco at this inquiry, Loblaw's Galen Weston appeared at a committee meeting in March and told a story about being confronted by a shopper who was upset about food prices.

Weston claimed that he explained factors that led to higher costs and the person said they didn't realize that because it wasn't being characterized that way in the news but people didn't believe him.

This article's cover image was used for illustrative purposes only.