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The 160,000-square-foot store is the seventh in Missouri.
McKenzie Robinson
The 160,000-square-foot store is the seventh in Missouri.

Costco arrives

Warehouse retailer opens in northeast corner of city

Posted online

A line of customers extended around the building in anticipation of the grand opening of Costco Wholesale (Nasdaq: COST) on Aug. 18.

First among them was David Teagarden, who said he arrived at 5:30 a.m. to do a little Christmas shopping.

“They have a great selection of good-quality products – they’ve got great stuff,” he said.

About an hour before the opening, General Manager Angela Bauer arrived to make final preparations and greet the crowd.

“We’ve been wanting you here for 20 years!” someone shouted.

Another voice hollered, “Got a good bourbon selection today?”

“Of course! We’re Costco,” Bauer replied.

The 160,000-square-foot store is the seventh in Missouri. It’s the first store to come to the Ozarks, a region home to the headquarters of Bentonville, Arkansas-based Walmart and Costco’s wholesale competitor, Sam’s Club.

The Springfield store is located at the intersection of Chestnut Expressway and U.S. Highway 65 at 279 Eastgate Ave., and boasts 700 parking spaces.

City officials expect the store to stem consumer spending “leakage” to other markets.

Sarah Kerner, economic development director for the city of Springfield, said the phenomenon of residents leaving a city to shop elsewhere was an issue for Springfield, as customers would travel to Kansas City or St. Louis to shop at Costco stores.

“A lot of money was being spent outside of the city,” Kerner said. “Now, those dollars are being spent here.”

She added consumers from surrounding areas will now be coming to Springfield to shop at Costco, and as they do, they may also visit other stores and restaurants.

“That’s why we get so excited about new entrants into the market,” she said. “It’s all about stopping that leakage.”

Costco’s doors opened about 15 minutes early, following a ribbon cutting by Bauer and Mayor Ken McClure.

“We are so excited to bring this to you, and thank you from all of us at Costco for asking for it,” Bauer said, oversized scissors in hand.

“What a great day for the city of Springfield,” McClure said.

He thanked those who had helped bring the store to town.

“We have so many people that have said, ‘I drive 150 miles to go to Costco,’” he said.

Just before cutting the green ribbon in front of the front door, Bauer made the pronouncement: “My neighbors in the city of Springfield, I bring you Costco Wholesale!”

The day before the opening, W. Craig Jelinek, president and CEO of Issaquah-Washington-based Costco Wholesale Corp., toured the store and visited with employees.

Costco is ranked No. 12 on this year’s Fortune 500 list with $166.8 billion in revenue in 2020, up 9.2% over the previous year.

Fortune’s 2021 list reports the company’s profits at $4 billion, with assets of $55.6 billion and a market value of $156 billion. The list recorded 214,500 employees – and the Springfield store will add to that figure.

Costco, a membership warehouse club, began in San Diego in 1976 under the name Price Club, and it was only open to small businesses, according to the company’s website. The first Costco warehouse location opened in Seattle in 1983, and in 1993, Costco and Price Club merged.

The company caps its markups at 14%, Bauer said, or 15% for the Kirkland Signature in-house brand, but the average markup across all Costco products is 11%.

Bauer, who moved to Springfield from a Costco GM position in West Fargo, North Dakota, said residents and development officials have been pushing for a Costco in Springfield for years.

“When they were asking for us to come here, they meant it,” she said.

Bauer declined to provide membership numbers for the new store, but Costco reports that it has 110 million members companywide.

Springfield council members paved the way for Costco in June 2020, when they approved a $4.8 million access and infrastructure agreement with the company. The city will reimburse Costco for public infrastructure improvements made to its 18-acre site. Plans called for relocating Eastgate Avenue and making traffic signal modifications and stormwater improvements. Springfield will repay Costco over a 15-year period through sales taxes generated by the store, according to past Springfield Business Journal reporting.

The company will be paid back for its investment by recouping half of the 1% general sales tax, quarter-cent capital improvements sales tax and eighth-cent transportation sales tax generated by the store.

Bauer said 180 or so employees will work at the Springfield store, alongside a temporary teaching and training team. The average hourly pay is $25.50, according to past reporting. The company announced in February it was boosting its minimum hourly wage to $16.

When asked how the hiring process went, Bauer said, “Better than I had hoped. The quality of people is phenomenal.

“The people of Springfield should be proud of their workforce. They are eager to learn, and if they can’t do it, they will figure it out and lean on each other for assistance. That’s the Costco way – to teach each other.”

Bauer said the store’s employee count includes about 55 transfers into Springfield.

Mary Lilly Smith is the city’s director of Department of Planning and Development, having retired in April. Standing outside of the store that had finally come to fruition, Smith appeared pleased.

“This was kind of my last big project,” she said. “I think Costco has a great reputation, not only as a shopping experience but also as a wonderful employer.”

The store carries the bulk-sized products that established its reputation, but these make up less than 20% of its stock, according to Bauer. Most grocery offerings are family sized. There is a large supply of produce, including organic items, as well as a meat department, bakery, premade meals and freezer section. The food court at the front of the store offers the deal the chain is known for: $1.50 for a quarter-pound hot dog and soda.

The store carries household and outdoor items and apparel. Also included are a tire center, vision center, hearing center and pharmacy.

A prominent feature in the front of the store is its electronics selection, which four customers near the front of the line Wednesday were especially excited about.

Joey Swofford, Weston Stillings, Connor Moran and Gavin Goss were eager to get their hands on the Sony PlayStation 5 gaming console bundle.

“It’s hard to get them anywhere else,” Swofford explained, adding that those that can be found locally or online cost about $1,000. The Costco website lists the membership price for the bundle as $640.

Swofford and his friends were among the first to leave the store, each bearing a PS5-sized box and a triumphant smile.

In his remarks, McClure credited the Springfield Area Chamber of Commerce, the Department of Public Works, the Department of Workforce Development and City Council for bringing Costco to the city.

McClure announced that Costco planned to locate in the city on May 28, 2020, confirming a year or more of rumors.

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