Costco Relocating In Fresno

[Alpha8472]

Fresno’s Costco store located at West Shaw Avenue since 1985 will be replaced by a 219,000-square-foot warehouse in another part of the city by 2025. It will have 32 gas pumps, a car wash, and a food delivery service.

Originally the new store was to be the largest in the world at 240,000 square feet. That was scaled down.

Supposedly the gas station at the old location 4 miles away will remain open.

I have seen Costco build new gas stations across the city lines near to their existing stores, but I don't know of Costco Gas stations 4 miles away from the nearest warehouse.

[storewanderer]

Costco has something like 10 new store projects going in NorCal. It is quite interesting.

I think they're trying to play chess to prevent Sam's Club from doing any expansion in the market. After Sam's Club closed two stores in metro Sacramento it doesn't bode too well. I think Costco may be hitting checkmate in NorCal.

[HCal]

Costco has something like 10 new store projects going in NorCal. It is quite interesting.

I think they're trying to play chess to prevent Sam's Club from doing any expansion in the market. After Sam's Club closed two stores in metro Sacramento it doesn't bode too well. I think Costco may be hitting checkmate in NorCal.

I would say Costco hit checkmate in all of California years ago.
The state accounts for almost 30% of their US sales. Sam's Club maintains a presence, and probably does okay, but they have no hope of ever catching up. If Walmart ever spins off Sam's Club, I would expect them to pull back in California and along both coasts, and focus themselves on the south and midwest where they are strongest.

[storewanderer]

Costco has something like 10 new store projects going in NorCal. It is quite interesting.

I think they're trying to play chess to prevent Sam's Club from doing any expansion in the market. After Sam's Club closed two stores in metro Sacramento it doesn't bode too well. I think Costco may be hitting checkmate in NorCal.

I would say Costco hit checkmate in all of California years ago.
The state accounts for almost 30% of their US sales. Sam's Club maintains a presence, and probably does okay, but they have no hope of ever catching up. If Walmart ever spins off Sam's Club, I would expect them to pull back in California and along both coasts, and focus themselves on the south and midwest where they are strongest.

No way they can catch up but some slight expansion would be good to see.

I think they'd have to make a decision about what to do with the California/west coast if they get spun off from Wal Mart. I would say it may be a "grow or die" type of situation. I am not sure exactly what the distribution structure of Sam's Club is at the present time but I think they have some kind of distribution in SoCal that handles a significant portion of the consumables for Reno. I would assume that distribution also handles places like Las Vegas and Arizona. So maybe they are okay with what they have and having a base down in SoCal. But that definitely limits them from doing anything in OR/WA and probably doesn't support very well any further expansion in NorCal.

[babs]

Costco has something like 10 new store projects going in NorCal. It is quite interesting.

I think they're trying to play chess to prevent Sam's Club from doing any expansion in the market. After Sam's Club closed two stores in metro Sacramento it doesn't bode too well. I think Costco may be hitting checkmate in NorCal.

I would say Costco hit checkmate in all of California years ago.
The state accounts for almost 30% of their US sales. Sam's Club maintains a presence, and probably does okay, but they have no hope of ever catching up. If Walmart ever spins off Sam's Club, I would expect them to pull back in California and along both coasts, and focus themselves on the south and midwest where they are strongest.

No way they can catch up but some slight expansion would be good to see.

I think they'd have to make a decision about what to do with the California/west coast if they get spun off from Wal Mart. I would say it may be a "grow or die" type of situation. I am not sure exactly what the distribution structure of Sam's Club is at the present time but I think they have some kind of distribution in SoCal that handles a significant portion of the consumables for Reno. I would assume that distribution also handles places like Las Vegas and Arizona. So maybe they are okay with what they have and having a base down in SoCal. But that definitely limits them from doing anything in OR/WA and probably doesn't support very well any further expansion in NorCal.

I always assumed they used Walmart's distribution centers.

[ClownLoach]

Costco has something like 10 new store projects going in NorCal. It is quite interesting.

I think they're trying to play chess to prevent Sam's Club from doing any expansion in the market. After Sam's Club closed two stores in metro Sacramento it doesn't bode too well. I think Costco may be hitting checkmate in NorCal.

I would say Costco hit checkmate in all of California years ago.
The state accounts for almost 30% of their US sales. Sam's Club maintains a presence, and probably does okay, but they have no hope of ever catching up. If Walmart ever spins off Sam's Club, I would expect them to pull back in California and along both coasts, and focus themselves on the south and midwest where they are strongest.

No way they can catch up but some slight expansion would be good to see.

I think they'd have to make a decision about what to do with the California/west coast if they get spun off from Wal Mart. I would say it may be a "grow or die" type of situation. I am not sure exactly what the distribution structure of Sam's Club is at the present time but I think they have some kind of distribution in SoCal that handles a significant portion of the consumables for Reno. I would assume that distribution also handles places like Las Vegas and Arizona. So maybe they are okay with what they have and having a base down in SoCal. But that definitely limits them from doing anything in OR/WA and probably doesn't support very well any further expansion in NorCal.

Sam's currently uses the Walmart distribution system but is working to construct their own. They also have several locations that were closed to retail and are e-commerce only warehouses. I know one is in the Phoenix area as many items I order that are online only come from that area. I am unaware of a Sam's that closed in City of Industry, but apparently there is another e-commerce distribution center there which services SoCal with shocking speed. I had a shirt I ordered in a color not available in store, and it arrived damaged by FedEx. I requested an exchange on their app late Friday afternoon, got a message to discard or donate it as they'll replace it automatically, and the new one was on my doorstep Saturday morning shipped "ground" from Industry. Amazon would be embarrassed by how fast Sam's delivers in SoCal with this facility.

Allegedly the number one performing region at Sam's for the last 4 years is California. It's carrying their whole organization. Remember that Sam's historically botched California and had opened themselves up to being run out of the state by the Costco Business Center rollout, but then Sam's turned Costco's strategy against them and refocused on the consumer business here. They're killing it in California so anyone who thinks they're going to pull back is delusional. It will be interesting to see their strategy over the next decade. Remember that right now their biggest priority is forming their own distribution network, which is indicative of trying to further separate from Walmart itself. Then they're going to push waves of new stores. Supposedly California is getting "several" distribution centers - they're starting with only ten across the country, so at least 2 or 3 going up here. It definitely sounds like they're gearing up for war in California, and they don't need to be doing a million dollars a day Friday through Sunday to turn a profit unlike Costco since they invest more in automation.

Costco is still making bad decisions about store size, building smaller and smaller. Fresno is an outlier as it's going to be a mini e-commerce distribution point, similar to the new appliance depot in Alaska. So the building is going to be large but not necessarily the store portion for the customer. They are still building smaller boxes than they did and then getting stuck redoing them at great expense. The relatively new Las Vegas area store in Henderson on St Rose is currently being forced to remodel as they construct new refrigeration units to push out the sales floor as they did many years ago on old buildings. This one is just a few years old and is already undergoing this expensive expansion because they under built, and the wall cutting was just finished so there is a huge hole in the wall inside the produce walk in cooler leading to what is the new cooler outside. Then they have to demolish the existing cooler and relay all the racking just to gain these few square feet. Murrieta, which was the most successful grand opening in the history of the Costco US division, is also undersized and I am told outperforms the Temecula location which somehow was not even remotely forecasted by Costco. Same issue, now they have to plan to expand the building and redo it because they built too small and are trying to fit more business than Temecula into a box that is at least 25,000 Sq ft smaller. It is concerning that Costco is so incapable of properly forecasting their staffing and store development needs.

Interesting about the Costco gas station in Fresno because I've heard conflicting things about their strategies. I did hear that they were considering freestanding gas stations, and that would align with testing such a strategy. But then they have been inconsistent with the gas operations at the business centers, with new warehouses not receiving gas stations. Huge missed opportunity especially since most business centers don't use most of their parking, for example the San Marcos location chained and fenced off half the parking lot (yes, a Costco with too much parking does exist). They could fit a massive gas station and car wash there. The car washes are another inconsistency, they slowly build more of them but don't automatically include on new stores. The most recent ones I'm aware of being added are Oxnard and San Juan Capistrano.

Costco runs the best gas operations in the US - they maintain their equipment better than anyone else in the industry, changing filters 3X a week when the franchisees at most stations do a couple of times a year at best. So the cleanest gas you can buy is Costco. They also now have long term contracts versus spot purchasing for reliable sources, for example in SoCal except San Diego their gas is Chevron from the El Segundo refinery.

The Sam's gas operation is inferior and a major weak spot in their organization. Not enough pumps, bad maintenance with multiple broken pumps, and lack of supervision to direct cars which increases sales as there is less downtime. Their cafe is also a weak spot, but Costco is apparently cutting back labor in their food court again and upsetting many people by making them wait in line to order at the kiosk, but no longer fulfilling orders by calling out the ticket number. Now they are forcing the customer to line up again and give their ticket to the one or two employees at the window who then pull and gather the order. It is horrible and apparently is rolling out as the new direction for all "outside" food courts. Inside will still call numbers and automatically pull orders as tickets print. It seems Costco wants to do less business at their US food courts, meanwhile go to Canada and they have everything from fried chicken to poutine on top of the full pizza menu and hot dogs.

[ClownLoach]

Fresno’s Costco store located at West Shaw Avenue since 1985 will be replaced by a 219,000-square-foot warehouse in another part of the city by 2025. It will have 32 gas pumps, a car wash, and a food delivery service.

Originally the new store was to be the largest in the world at 240,000 square feet. That was scaled down.

Supposedly the gas station at the old location 4 miles away will remain open.

I have seen Costco build new gas stations across the city lines near to their existing stores, but I don't know of Costco Gas stations 4 miles away from the nearest warehouse.

I did verify that 47,000 Sq ft of the newly downsized store plan is for an e-commerce warehouse, so that puts it just a hair over the current too-small 155K prototype once you subtract that footage. Thus it will not be anything "special" or "huge" to the customers eyes once it opens. They are building these relatively tiny 155K stores then having to go back and cut down walls all around the perimeter and construct new walk ins for dairy, produce, and expand receiving areas then push commodity items like water and paper towels into the old dock areas. So presumably this will go up with those "pop outs" already factored into the facility, making it a 172K store at opening with the e-commerce facility not counted. So decent size but not massive like many of the San Diego area warehouses that push 200K after multiple expansions over the years. But because of the e-commerce taking up so much of the store even if it built at the full 240K as originally planned the portion available to customers would be smaller than their largest stores (Salt Lake, Tukwila, Morena and others).

As far as the old store gas station remaining open, I wonder if they will replace the old store with a Business Center?

[HCal]

Allegedly the number one performing region at Sam's for the last 4 years is California. It's carrying their whole organization. Remember that Sam's historically botched California and had opened themselves up to being run out of the state by the Costco Business Center rollout, but then Sam's turned Costco's strategy against them and refocused on the consumer business here. They're killing it in California so anyone who thinks they're going to pull back is delusional.

Alleged by whom?

I feel rather skeptical about this. I've only been to a few Sam's locations in California in the last few years, but none of them have been what I would call busy. I also don't think I know anyone who has a membership. I had one which was almost free due to some promo, and then didn't renew it. Perhaps this is regional. I have occasionally seen food trucks and fair/festival vendors using Member's Mark paper products.

Their cafe was also a joke. One time they were out of pizza, another time they randomly closed early for no apparent reason.

[ClownLoach]

Allegedly the number one performing region at Sam's for the last 4 years is California. It's carrying their whole organization. Remember that Sam's historically botched California and had opened themselves up to being run out of the state by the Costco Business Center rollout, but then Sam's turned Costco's strategy against them and refocused on the consumer business here. They're killing it in California so anyone who thinks they're going to pull back is delusional.

Alleged by whom?

I feel rather skeptical about this. I've only been to a few Sam's locations in California in the last few years, but none of them have been what I would call busy. I also don't think I know anyone who has a membership. I had one which was almost free due to some promo, and then didn't renew it. Perhaps this is regional. I have occasionally seen food trucks and fair/festival vendors using Member's Mark paper products.

Their cafe was also a joke. One time they were out of pizza, another time they randomly closed early for no apparent reason.

Friends with a Store Manager who retired a couple of years ago from Sam's after a decade there. California was their worst division when he arrived and he was hired to run the worst store. It is still open today when others closed as they downsized in the 2010s so he did a decent job turning it around.

The stores I've visited are all busy. Pretty much equivalent to a Costco weekday (not weekend) busy. Fountain Valley is a very busy Sam's. Torrance is ludicrously busy, constantly all registers open and a terrible design with not enough space for customers to queue to exit. Fullerton was recently relocated on its own property because it had outgrown its building and is the newest location in SoCal, very busy. Corona and Murrieta both very busy. Ontario is extremely busy and got the new service meat counter installed recently which goes to their top stores. San Diego (where they only have one store) extremely busy. Oxnard extremely busy equal to the Costco across the freeway.

Remember that some stores are over 50% Scan and Go now, more affluent the area the better the adoption rate is, so observing the front end isn't always accurate. My local store in Murrieta sometimes has few people in line for checkout but more people in the line to exit having all paid on their phones. The other thing is that Sam's has a lower return rate than Costco which I find very interesting. Go compare a return desk and you rarely see a line there while Costco can be out the door. People like what they buy there.

Curbside pickup is also a big deal at Sam's and a big contribution to sales. My local store at any given moment has a dozen cars in the pickup area waiting for loading and three to four employees actively working the area. Usually I see at least one or two full flatbeds coming out of there, so that is a lot of dollars. If Costco ever got their act together and figured out a way to do this I think they would be very dangerous.

Ultimately Sam's stores do half the business of a Costco, but that is not an inconsequential figure as it's still far more than a normal Target and multiple supermarkets volume. It's still a crap ton of money and a few million per week, per store.

Only four SoCal stores I've observed that aren't busy are Chino, Long Beach, San Bernardino, and Moreno Valley. Which helps because when I'm looking for a hot item or clearance item and my store has sold out one of those four always has what I need and I just order it for curbside pickup.

Sam's Cafe is a joke I agree. Same for Sam's gas station. But they have come far from the dark ages of a few years ago and are really doing well in SoCal.

[reymann]

Sam's Club may be in expand mode in the central valley as they are opening a store in Visalia and are looking at locations in Clovis. Costco is looking for sites in SE Fresno for future expansion as the Sunnyside and Fancher Creek areas are going to see growth in the coming years as will Sanger.