And Costco has extended its operations to include another retailer project. The Corporation has opened two expendies Costco Home, one near the headquarters of its general offices in Kirkwood, Suburb de Seattle, Washington, and the other in Tempe, suburb of Phoenix, Arizona. Only available for Costco members, these stores offer home-old home decorated. Although the new formats have been successful, the company’s short-term plans only include a couple more Costco Home stores. Instead, Costco has plans to extend its network of warehouse club intensity. The expansion program includes 20 openings in 2005, 30 more in 2006 and 35 in 2007. In some cases, the intense expansion has led these clubs outside its security zones. For example, although Sam’s has been for many years the dominant warehouse club in Texas, in 2000 and 2001 Costco opened 10 new stores in that state. Analysts are concerned about the saturation of the US market, although a vice president of Sam’s affirms: “We do not see that this saturation necessarily happens in the future. We will simply continue to see good growth and markets for this format. “
Opening the business overseas None of the two club chains overlook the international scenario, with the challenges and opportunities that are proper to you. At present, there are more than 100 Costco locations outside the United States; Most are in Canada, with others in the United Kingdom, Mexico and Asia. SAM’s operates 80 clubs in five countries, as well as the United States. Both companies had to adapt to local tastes and shopping styles. Costco believes that the concept of the warehouse club is viable in any country, despite which was surprised at the variation of consumer preferences from one nation to another. For example, buyers of the United Kingdom like cranberry juice, which before did not have at their disposal. Olive oil, basketball baskets and donuts have been very popular in Japan. At the same time, both warehouse club chains continued to sell many of those articles in the United States. In 2005, warehouse clubs represented a domestic industry of 90 billion dollars, with Costco and Sam’s increasing their annual sales around 10%. However, the warehouse clubs currently only represent 4% of the part 5 sector
Domestic retailer, so it has enough place for growth.