Winnipeg Sun Believes Removal of Covenants Has No Effect on Competition

The December 13 editorial of the Winnipeg Sun believes competitive food prices only come from tax cuts. Removal of gas tax, business tax, property tax and income taxes. There is no mention of price fixing. Even if all those thing happened, the grocery and suppliers have fixed prices for bread and other items to that point that companies like Aldi believe the game is fixed here. And it is.

Large grocery stores have agreements to keep empty store faces or other competitors from setting up anywhere near them. Such actions with surely have U.S. authorities such as FBI kicking down the doors were it to happen in the States. The Sun says the Competition Bureau says the restrictive covenants don't restrict competition. In fact this is what the Canada's agency says:

A restriction on land that prevents a purchaser or owner of a commercial property from using the location to operate or lease to operators of certain types of businesses that compete with a previous owner.

The UK and New Zealand have restrictions on grocery stores from hoarding land and forbidding others from buying or using it to compete with them. This has NOTHING to do with taxes. Nothing. 

In Brandon a Sobeys was closed in 2017 and Sobeys has leased the property twice for five years terms to prevent competition. Above is a picture of that store. The Sun believes this is the result of overtaxing? Shindico said this was to prevent competition. Does the Sun believe this property should be restricted from sale or use? Do they even think this is a good idea? Why would Sobeys do this if they thought it didn't limit competition?

Antitrust is a real thing. It is private enterprise manipulating prices and competition. It happened with bread and it happens with property. The Sun says this doesn't exist? 

Prices are indeed affected by many things. But it just isn't government taxes. It is sometimes companies inflating prices, putting the thumb on the scales (or the packages) and they have been caught red handed. However, an empty storefront leased for years doesn't raise any eyebrows. It is the government's fault. 

What Restaurants Should Locate by Portage Avenue Costco?

Costco is now open along Portage Avenue. Even as the doors opened and work continued in different places, apartment construction continues. The rumours on restaurants locating right by the highway have jumped since last week. There are some diners further in Headingley such as Nick's Inn and Headingley Grill. Denny's operates on many days 24 hours. The Gates just across the river has fine dining. However, with Costco now open, the demand for drive-thru and casual dining in a growing commercial and residential area is rising.

There are many more stores coming to the area as well as apartment buildings. The plan is for at least 6 or 7 roadside restaurants and drive-thrus. Nothing has been announced yet but several places have been mentioned as potentials. Arby's comes up all the time as a potential tenant. It is no secret they want a second location in the city after the success at Seasons of Tuxedo. There has been talk of a return of Swiss Chalet to the site for a third return visit to the city. I'm not sure why this chain would think the results would be any different than the last times they were here.

Montana's has been mentioned as a possibility. It is highly likely that McDonald's will want to build out at the site given that their closest restaurant is inside Walmart Unicity. This is true of all the big chains. They will look at the Westport site because of the shopping, recreation and new housing going up. In 2026, expect the hear a flurry of announcements now that Costco has gone up.

To review some of the restaurants I've heard from clients that may look at kicking the tires of locating at Westport are:

Arby's

McDonald's

Applebee's/IHOP

Pancake House

Starbucks

Smitty's

My understanding is that breakfast/lunch places are highly sought after because of Costco's hours and to reach the commuters coming down the Trans-Canada Highway.

Tim Horton's is already on site and has been there for years. Robin's is possible but they have been struggling for years to come back. Some local coffee places that are possible are.

Thom Bargen

Empty Cup

The word is that a steakhouse/casual dining place is being looked for. Original Joe's is nearby already so that is unlikely. Some of the ones mentioned are:

Joeys

Moxies

Earls

Lot 88

Olive Garden

Frankie's

Chipotle

Stella's

A lot of people have had some swing for the fences hopes for restaurants such as:

Cheesecake Factory

Ruth's Chris Steakhouse

Texas Roadhouse

These restaurants don't have locations in Canada presently so seems unlikely they come now.

There are many in Winnipeg who probably have hopes of an American chain coming to the city that we don't have. It is possible. We have had a few come that eventually closed such as Earl of Sandwich, Royal Fork and Longhorn Steakhouse Winnipeg. Some like Famous Dave's just keep rolling along.

It is possible that some independent local restaurants opens on the site too.

One thing that is clear is that the huge amount of traffic is going to attract a lot of restaurants and retail to the area.

Costco Opening November 13 Portage Avenue

It certainly took long enough but at 6 am Thursday, Costco will open their newest location on 4077 Portage Avenue near Assiniboia Downs. It is a big location at just under 167,000 square feet. The massive gas station with pumps three deep has been open for a a few weeks. There is a special entrance to the Costco but it is likely going to be chaos. The 1000 or so parking spaces will be meaningless if everyone is at a chokepoint getting in and off of Portage. I don't even want to guess what it will be like during Christmas, Red River Ex or Derby. It is very probably that major road improvements will have to be made to the entrance to Costco.

It is likely that some people will be diverted from Kenaston Costco. Those living in St. James, Charleswood and Tuxedo as well as those west of the Perimeter will make Portage there chosen location. People at Kenaston hoping for their store to be less crowded might not see much change. The growing community of Bridgwater and South Point to the north and the Kapyong Barracks and Seasons apartments are adding thousands of units of housing.

The old St. James Polo Park location becomes a Business Centre same day Portage location opens up. The pharmacy transfers to Portage Thursday. Many of the staff will be there as well. There are a number of items as listed as sales in store  but is unclear if this exclusive to this opening. It is expected that some work will be continuing on some construction even as the store welcomes customers.

Unlike other Costcos in the city, this one has apartments all around it. Many of those people will be commuting as well in and out of the same entrances. And more apartments will be built over the next months and years.

As for the old St. James Polo Park location, they will be selling discounted meat on their re-opening today as a business center. Expect it to be busy.

One more Costco off north Main will be built in 2026 so traffic patterns will be realigned and perhaps...perhaps some traffic sanity will emerge in around Costco.

Rumours of Stores Coming to Headingley Costco Site

The Costco is already having an impact along Portage Avenue in terms of retail renovations and filling in some of the empty spaces along the street. The landlords with property sitting idle might get some calls of interest. Still, renovations to update tired spots is accelerating. Safeway and Walmart have renovated. Uncertain if other grocers such as Sobeys on Portage have renovated but most stores may require a re-fresh to compete. As mentioned, Costco 's imminent arrival will change traffic patterns and attract other retailers as well as residential.

This is an important thing to note about the Headingley Costco compared to the others in the city. The west Winnipeg one will have so much housing on site. It is only now, decades later, that apartments are going up on McGillivary are within walking distance of the Kenaston store. The problem is that there will never be enough housing around that store unless they decide to take over something like Rona property or build up vertically. And that wouldn't be instant.

Headingley has already seen a lot of residential building quite separate from the Westport Festival where the Costco is to reside. As seen in the plan above, there are a ton of apartments within walking distance of the store. Mixed developments are what every retail area tries to achieve now. The vulnerability of big box and regular malls to major retail closures has become all too apparent. The United States has found that even having a grocery store is no recipe for success for a mall since so many grocers are closing locations.

The rumours about what will join the Costco have been flying in the last weeks. Are announcements coming soon? The clues can possibly be seen once again in the plan above. There are two large retail spots that look suspiciously like a Red River Co-Op or a Save on Foods. Neither of these two have stores in the west part of the city. It is unlikely both grocers move in but expect an announcement of at least one of them coming. The other rumour is that now that Rona has rationalized their Lowe's Home Improvement stores into their national group and closed stores literally across the street from one another, they are looking to build a Rona in west Winnipeg. It could be that Home Depot might try to usurp Rona in their plans but they might be happy with the amount of stores they have now.

There is at least one hotel listed as going up. Rumour it was some kind of Hilton but  given the proximity to the iceplex, Assiniboia Downs, Red River Ex and the city of Winnipeg. A hotel, as opposed to a motel, is very much needed in the west part of the city. Large hockey tournaments consistently fill every motel along the strip. Two other motels on that stretch of Portage are usually jammed with hockey parents. It is not inconceivable that more hotels might be added to the plan given the attractions nearby.

Lots of restaurants were being added. It appears McDonald's to have a place by the roadside. They have a location at Walmart nearby but the nearest drive-thru is at least several minutes down Portage. There has also been talk of everything from an Earls to a Moxie's to a Joeys locating on the site. As far as new restaurants to the city, rumour has been Jersey's Mike's has been looking at the site. Also on the list has been an additional city location for Freddie's Frozen Custard and Steakburgers. In addition Shake Shack, Fazoli's and Chick-fil-A have all been mentioned as possible. Not on the list at all is Cheesecake Factory which has no Canadian expansion plans.

As far as other retail, it is likely some sort of sports store is likely although SportChek closed down just down the street. However, one story going around is they didn't want to sign a new lease if they were interested in the site near Costco. 

Another interesting rumour has been that a major gym will build a large fitness center in the shopping area. Whether this is Goodlife, Altea or a re-located Shapes or maybe something else entirely. 

Coscto's completion is expected this year so it is very likely a flurry of announcements comes soon on what joins it. It is worth noting that much like Seasons of Tuxedo, it could take a decade or more to fill all the space. Given the rumours though, it appears there is huge interest in the site.

Polo Park Billion Dollar Development Stalled

It should come as no surprise that Polo Park developer Cadillac Fairview along with Shindico went to great trouble to change the zoning around Polo Park to allow high rises. The airport opposed and was overruled so the go ahead to proceed to the planning phase began. And then nothing.

I suppose they might be forgiven in that other major priorities have them occupied which they are reluctant to say. For Cadillac Fairview, it has been to fill the second floor with the new London Drugs. The former Zellers site as been a frequent site for changes and London Drugs is an anchor worthy of the mall. The next task is to fill the huge empty space left by the closure of the Hudson Bay Company.

For more than a year, Polo Park and St. Vital Centre has girded themselves for what was to come if and when The Bay closed. They both have filled spots in the former Sears locations but it can't be easy to backfill constantly major retailers that have collapsed. Sears Polo Park was a major anchor and it required some innovative thinking to fill the spot. Likewise, St. Vital Centre also needed so do some thinking to fill the spot left by Sears closing. 

Cadillac Fairview would probably like to develop the properties they own where the old arena and stadium stood but is constantly having to work on the mall itself. While it remains the largest mall in the city, it is has lost some luster to Seasons of Tuxedo which continues to see more stores, restaurants, hotel rooms and and housing built. Presumably, all the things Polo Park wants. St. Vital Centre is pressed to expand anywhere. It is as hemmed in as you can get. Once they find something to fill the HBC spot, it will be interesting to see if they look to something different such as build up.

Polo Park's location along Portage Avenue and next to Route 90 could not be more well positioned for growth. Cadillac Fairview probably has another year or so till get their mall in shape. Once London Drugs is in place and The Bay filled in, I expect they will look at building the multi-unit housing that is in the plans. It is all so painfully slow.

As for Shindico, the actual construction of Costco after years waiting for the announcement is sure to trigger more of the development surrounding the big store through 2026. There are already large blocks of apartments and other residential units going up either side of Winnipeg and Headingley. Nearly all land preparation and traffic lights have been put in to support this development. One can imagine though that it is likely not enough. Already, Coscto has triggered Walmart Unicity to conduct a massive hundreds of thousands of dollars upgrade to their store. It is a huge improvement there.

All this development emphasizes the point that hundreds of millions are being spent on areas that have been waiting for years for work. The Costco in Headingley has been in the planning stages since before the pandemic. Now, it appears they are moving with haste on it as well and at the North Main Street location. The Polo Park location will become a Costco Business Centre.

The developer indicated that the new lower immigration rate, tariffs and other factors were contributing to the stall. There may be some clarity on the tariffs soon but it may be difficult to get to where we were in the last years with tens of thousands arriving each year. The truth is that immigration has been lowered because there was no capacity to house new arrivals. And capacity was a problem long before immigration was increased.

The federal accelerator program is now building affordable homes across the country that are shovel ready. This should be helpful as many projects, such as Polo Park, are more market driven and will not be viable for real affordability unless they receive some part of accelerator program money. The list of applicants is long. It is shocking how long projects take to get done. World War II was won in six years but building an apartment in Winnipeg can take a decade.

So much is happening in 2026. Portage Place becoming Pan Am Clinic, the Downtown Bay conversion, the old BMO Portage and Main becoming a museum, two Costco's being built and apartments all over the city. And Kapyong likely to take the next step on development. If Polo Park waits to long, they are likely to be passed by.

Second New Costco Coming Off North Main

The Costco at Kenaston seen in the above picture never has this empty a parking lot. This was taken during the Covid period. Built in 1992 and expanded, it was the biggest of box stores to go up in the area and attracted Walmart in 2000 and many other stores over the years. Costco parent company Kirkland said during an event honouring their CEO in Winnipeg that the city was on track to get a fourth Costco soon. Well, the last five years have been difficult ones with the pandemic, supply chain issues and now tariffs but the Winnipeg region has seen announcements for a fourth Costco and now a fifth Costco as well.

Two new Costcos in the 160,000+ square feet size in the west and north of the city are gamechangers. In truth, the city will have little say about the one on North Main as that is a block or so into the West St. Paul Municipality. Approvals are likely to speed through there. It is possible the province might have something to say about urban sprawl or traffic along Main. Meadowland and Main could become exceptionally busy.

I don't think there is anyone in Winnipeg who will deny that the three Costcos in Winnipeg now are packed to the rafters. Kenaston's store can be a nightmare at any time in the next and on any day.  Getting to the store along Kenaston is just as bad and those coming into the city or across the city to get to any Costco must dread it. 

It is without a doubt that people in the west and north parts of the city will make the new Costcos their chosen location. To be sure, it will relieve some of the strain on the other locations. However, the business is growing even now so people should not expect wide aisles with no one around to be annoyed as you stroll slowly with your cart sideways.

As for the smallest Costco, it will be closed a few months to become a Costco Business Center. It is very likely we will see a publicity push to explain what that is. For all intents, it will be a bulk supplier of goods and more suitable for a restaurant than say a family kitchen, better for an office manager than printer cartridges for the family office and so on.

In essence though, by the end of 2026, Winnipeg will have four Costcos and one Costco Business Center. They will cover all four quadrants of the city and the more central Polo Park area. The new locations will transform the north and the west retailing when they go up. That is to say that retailers who sell gas, do car repairs or sell services will have to better match prices. No more premium on gas sold on west Portage or north Main. Competitive prices on tire sales, tune-ups and the like. 

Grocery stores in the area will have to keep watch on prices at Costco. And restaurants will want to locate near Costcos. This is true for retailers as well. I can't imagine a liquor or cannabis store will want to be too far away. Just think what Costco did for the Kenaston area. In short, could Costco on west Portage result in Moxie's, Earls or Joeys opening nearby? Expect there to be a rush.

Hundreds of jobs will be created in construction and hundreds more employed at the stores. All in all this is a very good news story for Winnipeg as well as West St. Paul. This will hopefully add more competition to the grocery, gas and merchandise market in the city. The Unicity location should be up by October 2025 and the other location is expected in 2026.

Costco To Expand Footprint in West Winnipeg

As with IKEA when it began construction years ago, company execs of Costco have figured the space they are building for their store near Assiniboia Downs is not big enough. It isn't. At 166,000 square feet, it isn't so much the store size but the loading area and parking lot. It appears another acre just north of the Costco is being made available for the store.

Adding parking space is nothing new. Costco Kenaston has had parking space added twice front and back. It has helped but not enough. Hence, the new store. Compound the possible issues when St. James Costco becomes a Costco Business Centre. The store will be more aimed at supply hotels, convenience stores and restaurants than family shoppers. It surely means family shoppers will head to Kenaston or Headingley.

Make no mistake a Business Centre fills a need and could help divert businesses to switch there for goods that they get at regular Costcos. However, the city likely needs four regular Costcos all with gas stations. We'll have to do with three as zoning for a Costco even where there there is space can take a decade to get. This will be for Costco to decide. They probably would like to be just outside of Winnipeg but Walmart has tried this. It depends on Winnipeg road access and most municipalities are are not willing to build the highway access to make it possible. And Winnipeg is not going to let a road be overused within city boundaries to service a Costco that doesn't make taxes in the city to maintain it.

For all these reasons Costco is looking to turn the west Portage Avenue location into the right size to serve a very large section of the city. They'll need a lot of parking. More than the 900 parking spaces have been listed this far. They'll need traffic lights and turning lanes for this massive amount of traffic.

And Costco is just the first part of a much larger commercial development in that area. It is still within Winnipeg's boundary so it will be a boon for taxation. It will also be huge for housing. What will be needed is bus transport. The Costco construction continues so expect to see it open in this year.

Specsavers Opens in Winnipeg

Specsavers, a corrective lenses store has entered the Winnipeg market in a big way. They have opened two stores in CF Polo Park and St. Vital Centre and a third one will open in SmartCenters Winnipeg West also known as Unicity. The one in Unicity was formerly Orange Theory gym. Above is work being done to meet their September 12 opening.

Glasses are incredibly expensive even when purchased from Costco or Walmart. Specsavers will be offering glasses at $39 for single lens until September 22. Progressive lenses are every day priced at $149. Seniors 65 and over get 50% off starting September 9 for lens upgrades.

Specsavers started 40 years ago in the UK and entered the Canadian market in 2021. They have a 125 locations in Alberta, B.C. and Ontario. These will be the first Manitoba locations. Worldwide they have 2,700 locations run by optometrist owners. That is roughly 44 million customers.

Competition in the glasses businesses has been difficult to come by. It comes as a shock to many Canadians that many of the optical shops out there have the same corporate owner. There used to be a lot more competition out there. Specsavers should help in this regard. And the fact that they are opening in large malls is welcome as so many shops over the decades have closed in those locations.

Costco Finally Gets a Fourth Store

 

We saw plans in 2018 for a Costco by Assiniboia Downs and were told by their chief executive in a visit that a fourth store was coming but then the pandemic came in 2020 and all plans were off the table. It is now 2023 and similar plans are back for the same site. Same size Costco at 166,000+ feet and more parking than the original plan had. Keep in mind that Kenaston's Costco has had to parking expansions since it was built in 2007 and still barely has space each and every day. Regent also added parking as it too reached capacity. St. James doesn't have that option as the smallest location and doesn't even have a gas station. 

The new location appears to be larger than Kenaston and Regent. Those were built to a standard 150,000+ square feet. Same size as what is in Fargo, North Dakota. I found no records they ever expanded beyond original building. The first two Costcos at St. James/Polo Park and Regent were built in 1990 and 1992.  The third at Kenaston came, as mentioned, in 1992. The first Walmarts in Canada came in 1994 when Woolco was taken over by the big U.S. chain. It would take another six years or so for Walmarts to move to better locations. The original Costco in Burnaby, B.C. came in 1985 and this head start over other U.S. retailer gave it a strong advantage. The largest Costco in Canada is the recently completely one in St. John's at 182,000 square feet. That's pretty big but there largest in the States is 230,000 square feet.

Early arrivals and adapting have helped the Costcos and the Walmarts survive in Canada while the Targets and Nordstrom's have failed. If Costco is adding a fourth store, it is certainly because the demand warrants it. The Facebook and Reddit discussions mention the issues with crowds in Winnipeg and no doubt there is joy in the city that a new location is coming.

The one thing a Costco does in an area is create some competition. In terms of gas sales, Costco has an effect on pricing downwards for a few blocks surrounding it. Likewise, car maintenance places have to keep an eye on the warehouse store lest they lose business to it. A fourth Costco is good for consumers. Costco pharmacies have impacts on dispensing fees, optical purchases, meat, bakery and produce and third party business purchases.

Interviews with some business leaders like Foodfare in Winnipeg have shown they don't fear Costco. They have carved out a business operation that has worked well although everyone has been re-thinking supply chain issues, reliability and inflation. As the pandemic showed, overseas supply chain worked insofar as cheaper products only when fuel costs were low, world trade stability in check and interest rates down. Inflation means cost controls will come from supplies closer to home, sharing more costs of warehousing and shipping, more automation in logistics and if Costco's example is any indication, an army of people on the floor to assist in the human to human element of running a shop.

The development that Costco is in is called Westport Festival. There will be two traffic lights leading into it. The Red River Ex and Assiniboia Downs are located north of. The Iceplex is east of it as well as the car dealerships. It has been a busy area at times and it could get busier. It could very well be that this leads to more lanes on that section of road. The stretch to Headingley has been notorious for years for speeding and collisions.

It is difficult to say if Costco will make it easier along the section by the Kenaston location. The development of the Kapyong area into 2024 and the growth of Bridgwater and communities beyond make it seem like no relief is coming soon to the area. However, for many in the west part of the city, they can choose to use the new Costco.

No timeline exists for the opening but 2024 seems reasonable. A big question is whether Portage West Walmart will upgrade to compete. It doesn't have the grocery of other Walmarts and might lose business without doing something. We might see a few businesses along the street look to improve because it is not only Costco going up in that retail area.

For Winnipeggers, is the chance of more competition for these high inflation times.