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quote:
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.
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.
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Hawaii per capita income (almost by zip code) when marketing / planning folks talk about zipcodes - per cappita income ranks pretty high in the equation. Interesting read as to per person average earnings / demographic$:
http://en.wikipedia.org/wiki/Hawaii_loca...ita_income
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quote:
Originally posted by Spunky
Has nothing to do with their CEO, the economic status of our neighborhoods, what they pay staff, or whatever...
Actually, some of it does, to a certain extent. Another set of measures I find interesting to look at is Costco's demographic vs WalMart's in four general income rankings.
More than 50% of Costco's members are classed as Affluent, while less than 25% of WalMart's are.
Living Comfortably: Costco 31%, 36% Walmart
Getting By: Costco 12%, WalMart 29%
Poor: Costco 3%, WalMart 10%
IOW, Costco skews strongly to the Higher Income market. I think we can probably all acknowledge that a Hilo side store would not draw on as affluent a market as the Kona side does. So why take on the incresed cost of another store?
With a relative in the business, I know that justifying a new store is a complicated analysis. No single metric will trigger that kind of decision.
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Me thinks the move will be to online retailers
Costco has long boosted it sales with impulse purchases - aimed at folks with disposable income - its one of their marketing strategies - without disposable income to buy large quantities the strategy implodes.
Online retailers are growing while brick and mortar stores / chains seem to be merging (sears / kmart etc) or closing
Costco / sams must be nervous and careful these days
for me the up side to online - is I buy just what I need - nothing to catch my eye on the end cap near the checkout - grin
bonus link we were talking bitcoins the other day .....: http://www.dailypilot.com/news/tn-dpt-me...8358.story
edit - spell check and readers - ugh......
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People are willing to shop at Costco despite the long drive from Puna.
People are willing to shop at Walmart despite the long drive from Puna.
New shopping center in Pahoa has neither Walmart nor Costco.
There is simply no incentive to take on the effort/expense of building a new store.
(Funny thing, the Hilo Walmart is too small, it's often crowded, out of stock, sometimes there's even no shopping carts available. From where I sit, it's "obvious" that the east side needs a larger and/or second Walmart...)
Note also that "use DHHL land as a workaround for County planning/zoning" isn't a viable solution; DHHL is perfectly happy to grant exclusivity. (This is how the Lowe's plan fell through -- Depot got exclusive rights to DHHL lands within a certain distance of their store.)
But who cares when you have Amazon Prime? Now if only the post office were adequate...
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Yes, Punatics need more Garage canopies.
One Thing I can always be sure of is that things will never go as expected.
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"(Funny thing, the Hilo Walmart is too small, it's often crowded, out of stock, sometimes there's even no shopping carts available. From where I sit, it's "obvious" that the east side needs a larger and/or second Walmart...)"
nation wide the financial columnists have noted this as well - may not be unique to a Hawaii store.....
seems when sales drop - walmart cuts hours - more sales drop because the shelves dont get restocked.... a downward spiral has developed in some locations according to more than one financial writer... and is showing up on wally worlds bottom line....
meanwhile Amazon is gearing up for home delivery. Makes me wonder what kind of market / demographics that takes - not holding my breath - grin
I do think we will have self driving delivery vehicles in the next ten years.....
http://www.marketwatch.com/story/amazon-...2013-12-11
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quote:
Originally posted by EightFingers
Title got me excited, for a few seconds.
What about a Sam's Club? I know it's not as high quality as Costco, but it's a start. I bet if there's even a hint that WalMart is putting in a Sams, Costco will get real interested real quick.
I'd rather a Sam's here on Hilo side.
David
Ninole Resident
Please visit vacation.ninolehawaii.com
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I often visit Hilo/Puna from the mainland. I think that East side shoppers could appreciate and use a Costco. Their gasoline prices can’t be beat. They are excellent for bulk purchases: everyday items like toilet paper, paper towels, foil, and staples. Their house brand vitamin prices are excellent. And their meat and fish prices are good because they are in large size packages—perfect for the freezer or for big parties. Quality is excellent and they would fill a niche that Walmart can’t fill. Not to mention that their employees earn a decent wage with benefits. Visitors like me and my family would certainly appreciate one!
As with most things, just follow the money. Political roadblocks, real estate issues yada, yada..... A multinational corp. like Costco KNOWS how to sidestep these landmines, it's all about profit- or in Hilo's case, the lack of it.
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