December 20, 2010

Kosher’s Newest Opponent: Costco

It was perhaps a sign of the times when a Long Island kosher store advertised prices that are 10% - 20% lower than Costco. Kosher stores used to compete only against other kosher stores, but of late they are looking over their shoulder at stores like Costco, Target, Trader Joe’s and even Wal-Mart. The discount and club stores are actively courting kosher customers with an unprecedented array of kosher products that in many ways seem to be “loss leaders” for attracting shoppers for the rest of the store. Kosher stores say that while their customers still frequent the independents, they are shopping the club stores for produce, beverage, and even bakery.

I am convinced more than ever that today’s kosher customer has figured it all out. They still use the kosher independents for prepared foods, kosher specialty items, and meats, but look for discounted dry goods in supermarkets and buy their produce and discounted kosher foods at stores like Costco. I can appreciate the store that has decided to take on Costco head-on but it may be a futile exercise as more and more customers are shopping at the club stores. In Long Island, for example, the Costco stores have a wide variety of kosher items in almost every category. During a recent visit to the Brooklyn Costco, I noticed many “kosher shoppers” with their carts filled not only with such kosher items as cheese, hummus, and deli but produce, paper goods, aluminum foil, and even frozen, all items that offer the kosher stores margins they desperately need. I guess you might say: “Welcome to the new era of shopping!”