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Last updated: Sun. Oct. 06, 2013 - 06:25 am EDT

Costco joins retailers sold on the future

Much-anticipated opening adds to the glow of growth on north side

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At a glance

Company: Costco Wholesale Corp.

Address: 5110 Value Drive

Fort Wayne opening: Oct. 16

Employees: 200

Indiana stores: Castleton, Indianapolis, Merrillville

Annual membership fee: $55 annual base rate for families and companies

Jobs: Applicants may speak with store officials after applying online at www.costco.com

Source: Costco Wholesale Corp.

Costco Wholesale Corp. proves developers remain captivated by Fort Wayne’s retail landscape.

After all, you don’t invest $35 million on a pipe dream.

In about a week, the doors at the sprawling 150,000-square-foot megastore will swing open at the northwest corner of Lima and Progress roads. The membership-only wholesale club, known for its brand-name merchandise at lower prices, will draw thousands of weekly shoppers.

And not just from Fort Wayne.

Part of the lure of investing in the store is that the location is off Interstate 69 and can be seen from the highway. Commercial real estate expert Steve Zacher said the site selection was a shrewd move by the Issaquah, Wash., company. Costco built the outlet at the former Seyfert Foods Inc. plant, which closed in 2000.

“They can draw from a one-hour radius in several directions,” said Zacher, who assisted Costco in acquiring the land from Menard Inc. “We can pull people who may have chose to go to Toledo, Indianapolis or Merrillville. That’s positive for Fort Wayne.”

What that could mean in economic impact is substantial. The business has 70 million members worldwide and recorded nearly $100 million in total sales last year at 629 warehouses where it pays hourly workers $20 on average.

That means a lot to shopper Joseph Webster, one of thousands of northeast Indiana residents to sign up for a membership recently, Costco officials said.

“It’s important to me to know that the workers of a store I shop are paid well,” said Webster, a 27-year-old mobile phone salesman in Fort Wayne.

Webster said employees who are paid better usually provide better service for customers.

“That’s what I believe,” he said. “I went to a Costco in Washington once, and it just seemed like it offered better products, and I was treated well.”

Webster’s remarks are familiar to Theresa Williams. She is director of the Center for Education and Research in Retailing at Indiana University.

“Costco’s believes if they take care of its employees, they will take care of their customers. It’s a formula that’s worked,” Williams said.

The retail expert said that while Costco pays attention to demographics, such as income, other factors weigh heavily on whether it invests in a community. The company adheres to a values and attitudes measurement, Williams said.

Costco favors communities where buying habits are based more on lifestyle than need, she added.

“All retailers are very conservative when it comes to entering a new brick-and-mortar market,” Williams said. “There must be a strong demographic in Fort Wayne that is aligned with Costco’s strategy; otherwise, it wouldn’t be going there.”

Although online retailers will continue to peck away at traditional stores, Costco still has a following loyal enough to generate new customers.

“The small businesses are probably most nervous, but other warehouse-type stores should be, too,” Williams said.

“I’d be thrilled if a Costco was coming to my town.”

Sam’s Club also is a membership-only store. The outlet, owned by Wal-Mart, is on Lima Road just a few minutes north from Costco. A Sam’s Club spokesman has said the company feels it has a head start on its rival, having been in Fort Wayne for more than two decades.

Costco General Manager Melanie Crysler welcomes the challenge.

“It’s good to have competition because it makes everybody better,” she said. “They’re in a lot of the markets we serve.”

Crysler was promoted from assistant manager at a Madison Heights, Mich., store to run the Fort Wayne operation.

Crysler said the Fort Wayne site is attractive for a number of reasons, such as its drawing power from a 30-mile radius. Crysler said the company estimates more than 700,000 people are in that vicinity.

“We also look at the average household incomes and the number of big businesses in the area,” she said.

As for grand opening preparations – they are ongoing.

“We’ve been getting 11 semi-trucks of products a day in getting ready,” Crysler said of the store that also will have a fuel center. “Everybody has been super welcoming. It’s been a great reaction.”

Zacher said Costco, along with other retail investments on the city’s north side in recent months, cements the area as an attraction.

“It further solidifies the north side of Fort Wayne as the retail magnet for a wide region,” he said.

Recent examples include Carson’s, which invested more than $1.6 million in renovations to the former Marshall Field’s location in Glenbrook Square, a Burlington Coat Factory and a Dunham’s Sports store at Glenbrook Commons.

To combat online retailers, some brick-and-mortar stores have downsized to save costs, so Costco’s investment speaks volumes about how it views Fort Wayne’s future, Crysler said.

Pat Teeple, 56, a classroom assistant in Fort Wayne, said she looks forward to getting school supplies from Costco.

“I shopped at one in Utah and just loved it,” she said. “They have everything. I just have to check with my husband to see what type of membership to buy.”

pwyche@jg.net

 

 

 


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