Canada

Costco’s business model makes way more sense

Yes, there is something to be said about only opening stores in high density, high income neighbourhoods. With only 855 stores worldwide (and only 107 in Canada), they are able to generate well over a billion dollars in net income by doing so.

But there is only so many high density, high income neighbourhoods, and they can only handle so many stores. It is not really a duplicatable model. Instead, Loblaw and the like go where Costco refuses to. You can actually find their stores in small towns and other poduck places.

Sure, it's not nearly as profitable serving the poor. Loblaw has over 2,400 stores, yet only sees a measly 500 million dollars in net income, but ultimately someone needs to service those markets. And, really, it's still a pretty good gig. Old Galen there isn't exactly hurting.