Costco on the East side

[OpenD]

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Originally posted by spunky
I asked the Costco marketing staff about opening in Hilo when they were at an event at the Butler Building recently. The staff said that nationwide they will open a second store when the number of members reaches a certain percentage. If I recall correctly, the percentage is about 15%. Thus 15% of the members shopping in Kona have to live in Hilo or east Hawaii before they would considering building in Hilo. The Costco staff said they are half way to the threshold # of members needed to open a Hilo location.

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Sounds to me like a great way to sell memberships in Hilo when the store is in Kona!

I seriously doubt these figures are, even if accurate, the whole story. Across the country Costco stores average 50,000 memberships each, and they typically don't try to spin off another store in the same market until they pass that number. Hawai'i County would have to have more than 25% of the population be members to hit 50,000.

And there is also a consideration of how much of a hit the original store will take if a second store opens. Plus they have to consider how many new members they will be able to pick up by opening a second location, compared with the cannibalization of the first store. Let's say the Kona store did have 50,000 members, and 15% were from Hilo, that's still only 7,500 memberships from Hilo side. How many MORE would they pick up from opening a Hilo store? That's a more critical calculation than any simple percentage factor.