Wednesday, November 24, 2010

Menards Coming To Winnipeg - Sort Of

I noticed a Menards ad insert in the paper a little while back. I don't think it is the first time either. Manitobans are frequent shoppers at this large scale hardware store in Grand Forks and Fargo. In fact, I would hazard a guess that the store may have been the first experience of a big box format that many a person from the province had.

On CBC tonight, the news indicated that the our friends to the south are expecting a huge onslaught with the U.S. Thanksgiving Black Friday sales. One of the places expected to do well is Menards.

Menards has announced that they will be opening a service center in Winnipeg to received shipped goods from their Grand Forks operation. The cost of purchasing items is about a 40% discount on what Canadians usually pay. It is not surprising that 30% of the customers at Menards in Grand Forks are from Manitoba.

I would do one better. Perhaps it is time for the an invitation from the bigwigs in government and business for Menards to open a full store and distribution center in the city. Perhaps it is time to join their fellow compatriots from Cabela's in setting up shop.

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RM said...

Cabela's in Winnipeg and Grand Forks are very different. Pricing, selection, and customer service are not really the same, or comparable. Menard's would end up being a shadow of itself if it were a true "store" here, being charged the outrageous taxes by all levels of government. My guess is that they'll avoid a lot of the regressive taxes by remaining a distribution warehouse and take their money "home" with them.

John Dobbin said...

Cabela's in Winnipeg has been the foothold for the company in Canada since acquiring SIR.

At some point, like Wal-Mart when they took over Woolco, I expect Cabela's to look like their Grand Forks counterpart. Certainly, they have begun a western Canada expansion that will build a retail store modeled on their U.S store design.

As far as pricing goes, I have no idea. There is a lot more to Canadian prices than simply looking at taxes. Even with the absence of any provincial tax like Alberta, there is still a 100% mark-up on IKEA products. I don't know that corporate taxes and GST can possibly account for that high a mark-up and even the companies don't make that claim. Instead they talk about things like distribution and smaller markets.

I think we can say that Wal-Mart is a very similar operation in Canada as well as McDonald's. I think some companies choose to do things differently when it comes to price and service. For the two above, the prices are such that some things such as the Big Mac, you find cheaper prices in Canada.

If Menard's did come to Canada as a full service store, it is possible they would have the same principles of discounted prices and great service as their U.S. counterparts.

One thing is clear: The U.S. deficit means that something has to give in either tax increases or cuts. And in some cases even if all government operations ceased, there would still be a deficit due to the debt. The disparity in price could narrow considerably.