Friday, July 29, 2011

Costco expanding in the area; in Bucks right near Walmart

by Peter Van Allen

"Costco Wholesale Corp. is expanding in the Philadelphia market, but it remains to be seen how much of a presence it will eventually have.

In coming months, Costco, the Issaquah, Wash.-based discounter, plans to open stores in Limerick and Warminster, increasing its count of Philadelphia-area stores to five.

In Warminster, Costco’s location will be across the street from another well-known discounter, Walmart. Each will occupy corners of the intersection of Street Road and Jacksonville Road.
While it would seem to set up a prime rivalry, analysts insist they’re going after separate customers.

David Strasser, an analyst who follows Costco for Janney Montgomery Scott, also downplayed the rivalry.

“Two things: First, Costco and Walmart are very different stores, very different demographics and probably not very big competitors,” he said.

For now, Costco has been quiet about its intentions locally. It has not said how many stores it intends to build in the area. The company has 588 “warehouse” stores, including 429 in the United States. Sales for fiscal 2010 were $76 billion.

Walmart, which is based in Bentonville, Ark., and posted annual sales of $418 billion last year, has a long-established presence in this market, going back to the mid-1990s. In the region, it has 20 stores. The company’s Sam’s Club has seven area locations, but none within close proximity of the Costco stores.

On Aug. 17, Costco will open a Limerick store. Walmart’s plans to open in Limerick were stopped by resident opposition last year and, at least for now, Walmart’s nearest stores are in Pottstown and Reading, each of which are about 10 miles from Limerick.

The 148,000-square-foot Limerick store is at 14 W. Lightcap Road in the Gateway at Sanatoga shopping center, next to the Philadelphia Premium Outlets, off Route 422.

It will be the fourth store in the Delaware Valley. Other stores are in King of Prussia and Montgomeryville, and in Mount Laurel, N.J.

The Costco store will offer name-brand and private-label merchandise. It will offer a wide range of products and services, from gas to groceries. It will also have an optical department, one-hour photo, pharmacy, tire center, hearing aid center and food court.

Costco operates on a membership basis, starting at $50 a year. An “executive membership,” at $100 a year, offers additional discounts plus a 2 percent reward, or rebate, up to $500 a year.

In addition to discounts, members get help in booking travel and buying cars. Costco has 61 million card holders worldwide.

Sam’s Club memberships start at $40, with a $100 “advantage plus” level."

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