Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
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prices largely because of the annual membership fees it collects — $55 per year for Gold Star and Business mem- bers, and $110 for Executive members. There are some 25 million Gold Star members alone. Costco does a good job selling its THE FOOD COURT OF THE OVERLAND PARK, KANSAS, COSTCO in-house brands. Kirkland is one of the strongest private labels on the mar- ket today. "When consumers are feel- ing pinched, they do two things: They find alternate low-price providers, like a Costco, and they trade down from a national brand to private label. So I think Costco wins on both fronts," said Binder. In addition, Costco benefits from high gas prices because of its own discounted gasoline prices. Costco's actual rollouts of new units habitually fall short of announcements because of the tough logistics involved in opening its stores. Costco is increasingly looking be- yond the U.S. for growth. "Costco is one of the few retailers that have found that their format is portable to interna- tional markets," said Binder. The com- pany operates 82 stores in Canada, 32 in Mexico, 11 in Britain, 11 in Japan, 8 in Taiwan, 7 in South Korea and 3 in Australia. During fiscal 2011, Costco opened 19 stores worldwide, relocated three and closed three. The company announced plans to open 20 in fiscal 2012, 11 of which will be in the U.S., one each in Canada and the U.K., and seven in Asia, including stores in Taiwan and South Korea slated to open in August. Costco's actual rollouts of new units habitually fall short of announcements, Binder says. This is attributable in part to logistical delays associated with finding 20-acre parcels and then obtaining the permitting and approvals. There are cases where sites do not work out, and Costco is picky about locations, says Binder. "We have seen retailers sacrifice quality in site selection and ultimately, it comes back to haunt them," he said. "Costco is not in that camp." SCT 102 SCT / MAY 2012