Costco Shops for Real Estate

At least Costco CEO Jim Sinegal thinks now is the time to buy.

“We’re getting better deals on real estate,” he was quoted saying in a recent Reuters report. “People who didn’t want to talk with us about shopping center sites now want to talk with us.”

Costco’s new-store plans aren’t off the charts this year, with 25 to 30 new stores. But Sinegal says the 553-store discount-warehouse chain, should do well in the recession, despite less-than-stellar fourth-quarter results due to increased discounts.

Do you think property owners will take Costco up on its offer, and if so, how much more should the retailer expand?

Advertisements

12 Responses to “Costco Shops for Real Estate”


  1. 1 Larry Wright March 20, 2009 at 6:24 am

    What is good for CostCo is good for America. Contact me, Larry Wright, for possible sights in southern Nevada and California. larrywrightrealty@cox.net (702) 474-9729

  2. 2 Alex March 20, 2009 at 8:44 am

    Ian – im shocked – your crowd is ALL ABOUT the costco and no one has replied! It would be nice for Costco to go into new markets, and keep the contained growth. Its the way that normal folk can experience a bit of “quality” and luxury in this market at a discount price. If not to purchase, at least to view! Hey Ian – what percent of profit is from the membership fees?

  3. 3 iritter March 20, 2009 at 9:02 am

    Alex-
    2% of total revenue.

  4. 4 Glenf March 20, 2009 at 9:28 am

    I buy all of my gas at Costco and my annual Costco American Express rebate equals about three times my annual dues! What do you think about that, Sam’s Club?

  5. 5 Alex March 20, 2009 at 2:09 pm

    Glenf- I think you’re nuts. Thats a lot of wasted gas. If you are getting $150 back ($50 membership fee) with a 3% rebate on gas that means you’re spending $5k on gas a YEAR. With average price $2/gallon thats 2500 gallons/year and with average fuel economy at 25mpg thats 62,500 miles PER YEAR or 171 miles EVERY DAY. Dude, do you LIVE in your car!??! seriously, thats nuts. I wouldnt be proud of getting that much cash back. Ian – am i right or am i right?

  6. 6 Derrich March 23, 2009 at 8:07 am

    …or Glenf has a family that purchases gas there as well?

    I’m sure there are situations where CostCo should take advantage of these deals. But optimizing its product mix (i.e. “300 count [sheets] blew off the shelves”) seems like a better bet than speculating real estate. Hopefully they don’t ‘optimize’ too much. As odd as it sounds, there is a quality aspect to CostCo’s image. Otherwise, they might as well be called “Huge WalMart”. But not even Sam’s Club wanted that name.

  7. 7 Adam March 23, 2009 at 9:29 am

    For gas I use a Shell MasterCard, save 5% on gas, better than Costco’s 3% and better gas. But, I do most of my shopping at Costco, big screen tvs, food, consumer durables, and that all ads up big time. I Have an executive membership and the amex Costco card so I get 3% off everything I buy from Costco. I already got $120 back from my amex this year, that’s cuz you get 3% back on ALL restaurants too! Will get 2% on everything from Costco in June or so, I think I spend about $7,000/ year there so it definitely pays to shop at Costco, IF you use it enough.

  8. 8 Lisa March 23, 2009 at 9:31 am

    Love to see Costco in the Lakewood Ranch area. When I visit in California it seems to have a better selection than BJ’s where I’m a more regular shopper or Sam’s Club which I frequent occasionally. Is it my imagination?

    Also was at Prime Outlets yesterday and hardly a parking place in site. Evidently no recession problems in the discount marketplaces.

  9. 9 Brave New World March 23, 2009 at 5:02 pm

    COSTCO should start looking now, but buying at the end of 2010. Those who wait out the shakeout will profit, those who jump too soon will drown.

  10. 10 little nat March 24, 2009 at 9:21 am

    I think Costco should be very concerned that they don’t turn in another WalMart,despised for their ability to kill the Mom and Pops. I know it would be tempting to take on more stores and as usual,lose their ability to keep the customer service as healthy as it is now. The few times that I have been in a Costco,does it concern you as much as it does me that you wonder where all those birds take a crap while they fly around the store and over the food.

  11. 11 Nancy H March 24, 2009 at 1:27 pm

    With regard to the article…I do think that Costco is going to be approached by some of the developers who previously thought their real estate was too hoity-toity for a Costco before now. I work in commercial real estate, and I am seeing developers who bought huge shopping centers to renovate and re-open a couple years ago, only to watch one tenant after another shut their doors. One shopping center that was bought in 2008 had a Cirquit City (gone), Linens & Things (gone), Mervyn’s (gone), and the Target at that center is moving… The real estate isn’t worth much now, with Best Buy and Home Depot as the only draws left, and with all those big boxes available right next to each other, they’d be nuts NOT to talk to Costco. The discount stores are going to draw the crowds – for quite awhile. Why do you think Walmart is doing so well, in spite of everyone’s vile hatred of the flippin’ store? I love seeing good competition for Wally-World, and hope Costco does spectacular in 2009/2010.

  12. 12 Scott March 24, 2009 at 1:41 pm

    The deal I get on car and auto insurance from Costco (Ameriprise) pays for my membership and still saves me hundreds of dollars and I don’t even shop there. Hopefully they buy some real estate closer to where I live so I can shop there too!


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s




Subscribe
Bookmark and Share

Archives

March 2009
S M T W T F S
« Feb   Apr »
1234567
891011121314
15161718192021
22232425262728
293031  

Ian Ritter on Twitter

Error: Twitter did not respond. Please wait a few minutes and refresh this page.

RSS GlobeSt.com’s Top Stories

  • An error has occurred; the feed is probably down. Try again later.

%d bloggers like this: