Inside This Issue - News
Expansion push eyed by Costco
June 10th, 2013
ISSAQUAH, Wash. – Costco Wholesale Corp. plans to open about 150 new warehouses over the next five years. Of that total, somewhat more than 55 will be in the United States.
In response to analysts’ questions during Costco’s recent third quarter conference call, chief financial officer Richard Galanti said that the decision to accelerate international expansion was made two or three years ago and was based on the longer time line required to open stores in foreign markets. He noted that the company originally envisioned having 75 warehouses in Canada but with the withdrawal from that market of a major competitor (Sam’s Club), Costco now has almost 90 locations and expects to exceed 100.
Galanti also noted that the company has more real estate staff in more countries now, which has enabled the retailer to build up its future warehouse pipeline rapidly. U.S. expansion, he added, will probably be split evenly between filling in current markets and entering new regions.
"What we have found over almost 30 years, and what I assume we’ll continue to find, is we’ll always end up opening a few more than we thought were possible," Galanti said.
In the first three quarters of its 2013 fiscal year Costco has opened 19 warehouses and plans to add another nine in the fourth quarter for a total of 28 for the year. In fiscal 2011 and 2012, Costco opened 20 and 16 warehouses, respectively.
Reflecting the international focus, 13 of the new units will be in the United States, three in Canada, three in the United Kingdom, five in Japan and one each in Taiwan, Korea, Australia and Mexico.