Costco stays true to off-price formula
September 6, 2002,
New York — Costco president and ceo Jim Sinegal refuted the notion that the retailer could raise prices slightly and its customers wouldn't notice, as was suggested at yesterday's Goldman Sachs Global Retailing Conference here.
"The reason customers shop with us is for our quality and that we drive such a hard bargain. We could start to raise prices, but in my view that's a mistake for our business in the long term."
With 394 warehouses averaging $102 million in sales and 135,000 square feet each, Costco will add 59 units within two years, though the majority will be in existing markets, said Richard Galanti, executive vp and cfo.
Costco also just opened its second two-story unit in the United States, in Port Chester, NY. A two-story unit is essential where real estate is scarce, Sinegal said. "It's a costly way to do business" but necessary if it wants to get into those markets.
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