I missed the edit window to add, Costco certainly does create a sense of urgency and uncertainty with inventory. I can think of a number of favorite items that we bought regularly that they no longer stock. Several times I’ve bought items that I thought were a really good value, and then when I looked a few days later they were all gone, never to return. Nowadays if I see a non-perishable that I think hubby or the kids will like, I’ll just buy it knowing that I can easily return it–they have an excellent no-questions-asked-no-receipt-required return policy.
Yes, they train their shoppers well–reading the posts by GMANCANADA and isosleepy, I realize that they have me trained!
Last weekend it appeared they had about 4 pallets of Halloween candy on the floor. Don’t know how much in the back, but I assume they were close to out. They sell 120- per box mini chocolate bars (among other things). They had them on sale a month before Halloween, marked down from $C17.95 to $C12.95 - then back up again a week later. They do that sort of thing.
Last year it appears they ran out the week before Halloween.
We had 302 kids at our door; but now I still have to figure out how to dispose of 3 left-over full boxes. My rule of thumb - if you have visible facial hair or your costume shows visible cleavage, you are probably too old for trick-or-treat.
This reminded me–I did see some candy when I was at Costco on Nov. 1. When doing a return, the customer in line ahead of me was returning a bag of 200+ mini-candy bars. Someone else in the line asked if they were Halloween leftovers and she said yes. They didn’t look like they were in Halloween packaging or had anything marking them as seasonal, though.
From what I know about Costco, if they did price drop for a week followed by an increase, likely they were responding to another retailer’s pricing. I’d guess someone advertised a “blowout sale”. Costco doesn’t want to be seen as a discounter, but do want to be seen as competitive.
-Although I’m sure there are some exceptions (like maybe pharma products & books?), in my experience Costco doesn’t have any inventory “in the back” like a traditional retailer. They typically buy only 1/4, 1/2 or full pallets and drop the entire unit on the warehouse floor. That’s one of the reasons they have a low cost structure, they don’t dick around loading individual stock onto shelves. They will have a week or twos worth in inventory in the racks above. That is driven by the stock turns of the items versus their store capacity to receive products at the loading dock (like I said they are very sophisticated).
Your comment about “creating demand” and then withdrawing a product is 100% wrong for Canada (I can’t speak to the US at all). The competition act in Canada expressly forbids manufacturers from discriminating between retailers based on price or product offering. All products must be made available to all retailers, This retailers must have the ability to buy for the same price (to achieve the same level of discounts). There were historic cases where very large retailers would leverage their power to stop suppliers from selling to new upstart retailers: “If you sell to X retailer, we will delist all your items”. That law stops this.
The companies I worked for were 100% transparent in pricing and product offering. I literally showed Costco’s price and how we arrived at it with various discounts (volume, single pallet, shipping etc), to any retailers who asked from small independent stores to Walmart. Plus Costco always sold at 8% to 12% mark-up. Most retailers are nowhere close to that, usually at 50% to 100% mark-up. I’d say “If you want to meet the same terms and conditions we spell out and sell for this margin, you can match their price” Few ever did.
@ Kaylasdad. I did call on Sam’s Club when they were in Canada but as it turns out they got their asses kicked by Costco and closed all their stores after a few years! Their merchandising philosophy was slightly different than Costco in that they sought “temporary items” at deep discounts. When you walked into a store the main aisle (they called it the “Power Aisle”) had separate pallet displays of “one time buys” (I think that’s what they called it). It was their way of training shoppers to “buy now or it’ll be gone”. I did sell them seasonal items, but I don’t recall end of season items being an issue.