1,300 jobs “threatened” by the arrival of Costco in Rimouski

The opening of a Costco store in Rimouski in 2025 will weaken more than 1,300 jobs and eight commercial sectors, mainly the food sector, according to a report of which - obtained a copy.

Although it is a regional commercial concept that attracts customers from outside Rimouski, the businesses most affected will be those in Rimouskiestimate the authors of the report Update of the commercial report and evaluation of the effects of the arrival of Costco in Rimouski, published by the Quebec firm Demarcom in August 2023 and obtained via the Act respecting access to documents from public bodies.

If nothing is done by the targeted companies, it is very possible that their market share will disappear.which could lead to the closure of these businesses, even adds one of the authors of the document and president of Demarcom, Pierre Laflamme.

It is the Rimouski Economic Promotion Society (SOPER), now bankrupt, which commissioned this report from Demarcom. The objective was to identify the sectors of activity which could be more vulnerable to the arrival of Costco in the Lower Laurentian city.

And there are many of them. But it is the food sector which risks paying the price for the arrival of the American giant in the Rimouski commercial landscape.

The case of supermarkets is the heaviest casewe can read in the 35-page document.

Start of widget. Skip the widget?End of widget. Return to start of widget?

In fact, Rimouski grocery stores generated sales of more than $288 million in 2023 according to the City’s commercial report included in the report. This makes the authors say that the local economy already appears to be able to satisfy local and external customers.

However, the arrival of Costco will change the situation. Demarcom estimates that Costco’s potential sales in this area will be approximately $73 million, or 31.9% of the overall supply.

Start of widget. Skip the widget?End of widget. Return to start of widget?

Still according to the Demarcom report, nearly 20% of sales in Rimouski grocery stores were made to customers from outside Rimouski last year. Costco risks eating into this market share, which will ultimately cause “a loss of sales for existing supermarkets of 16.1 million”, confirms Pierre Laflamme in writing.

Given the popularity of the trade [Costco] and the scale of the surface area devoted to food, there will certainly be concrete effects on supermarkets.

Bakeries and pastries also risk paying a high price for Costco’s presence in the Rimouski landscape. The local offering of companies in this sector is minimumaccording to the report, with sales valued at $483,567 in 2023. Costco’s offer is valued at just over $11 million.

So many deals are sure to hit the bakery sector unless there is a strategic repositioning on the part of these companieswe can read in the research document.

Rimouski hardware stores, which generated a commercial offering of nearly $10 million in 2023, will also have to contend with Costco, whose estimated sales in this area are valued at nearly $35 million.

Don’t take Costco head on

The establishment of Costco in Rimouski in 2025 could therefore lead to the loss of 1,312 jobs if nothing is done by the most vulnerable businesses.

Pierre Laflamme concedes that Costco menace these jobs, but he believes that more vulnerable companies can still reverse the trend.

I remain optimistic about this. Although this business threat is real, it is always possible to modify the strategic plan of companies to get closer to their customers and offer them more personalized services.he nuances. This will allow more vulnerable businesses to distinguish their offer from that of Costco, which will remain impersonal.adds Mr. Laflamme.

The expert in commercial recovery issues warns, however, that weakened companies will have to differentiate themselves strongly from Costco, otherwise these businesses place themselves in a situation of dangerhe assesses.

Regarding the potential loss of jobs, Pierre Laflamme still adds that the situation can be slowed down if the Costco store hires approximately 250 employees.

Mr. Laflamme estimates that the loss of 1,312 jobs would represent a shortfall of $39.4 million for the local economy. It adds that the average annual salary for a Costco employee is $54,142 in 2024, representing a total value of $13.5 million.

This helps to reduce the extent of the shortfallbelieves Mr. Laflamme. Costco would curb the setbacks of lost jobs by adding new, better-paying jobshe adds.

Commercial leaks to be plugged

The arrival of the American giant will not only have harmful effects on the Rimouski economy, according to the authors.

They argue that the multinational has the potential to generate annual sales estimated at nearly $270 million, which represents the equivalent of 40% of purchases made locally by Rimouski residents in 2023.

Open in full screen mode

They specify that the commercial offer in Rimouski is estimated at almost a billion dollars in 2023. The authors also calculate that Rimouski residents make purchases outside the City which represent 385 million dollars, a phenomenon called commercial leaks.

The arrival of a Costco store will help plug a significant portion of these leaks. In fact, this represents an improvement in local commercial autonomythey estimate.

Their research report targets several sectors that are currently suffering from commercial leaks, leaks that Costco could largely absorb, they say.

Start of widget. Skip the widget?End of widget. Return to start of widget?

For example, there are commercial leakages of $17 million in the butchery sector in Rimouski while the estimated sales of a Costco store in this sector are $10 million, according to Demarcom.

Another positive effect of the arrival of Costco in Rimouski: the multinational will create commercial hubs majorstill according to the document written by the firm Demarcom.

Open in full screen mode

This means, according to the authors, that Costco’s contribution reinforces the existence of a center already in place. The commercial sector is becoming even more important in Rimouski to attract surrounding customers.

Costco’s estimated sales are $35 million for hardware products and $11 million for the furniture and office supplies and stationery departments. These three sectors will become major hubs, according to Demarcom.