Retail

Costco’s arrival in Wichita gives shoppers more choice

Plenty of shopping carts are ready for customers at Costco Wholesale at Kellogg and Webb. The store is set to open June 3.
Plenty of shopping carts are ready for customers at Costco Wholesale at Kellogg and Webb. The store is set to open June 3. The Wichita Eagle

The wait is almost over.

In less than two weeks, warehouse club Costco will open its first Wichita store.

For area consumers who agree to pay an annual fee, it means they won’t have to drive more than 170 miles to shop at the two Costcos closest to Wichita, in Lenexa and Overland Park.

It also means Wichita residents will have a choice in which warehouse club to shop.

Sam’s Club has been the area’s only warehouse club since 1985. It has three Wichita locations. Wal-Mart-owned Sam’s opened its third warehouse store less than a year ago at 3084 N. Maize Road.

Sam’s stands to lose the most with the entry of Costco into Wichita, retail industry experts said, although other general merchandise retailers could also feel a pinch in area sales.

Carlee Wunderlich, Costco’s Wichita warehouse manager, said this week that her 150,000-square-foot store at the northeast corner of Kellogg and Webb will be ready for business at 8 a.m. on June 3.

“The first thing they’ll (Wichita customers) notice is the building itself is beautiful,” Wunderlich said. “Everything we do is quality. I think that will be apparent in our people, our products and the quality of the building itself.”

Construction of the more than $20 million project on former Beechcraft property began in November 2014. The project followed more than two years of speculation that the Issaquah, Wash.-based warehouse retailer was coming to Wichita.

The store, at 9700 E. Kellogg, will offer brand-name and private-label merchandise and have a number of specialty departments that include meat, produce, photo and optical departments – with an independent optometrist – as well as a bakery, deli, food court, pharmacy, hearing aid center and tire center. There also will be a fuel station in the parking lot.

The Wichita Costco employs 240 people, at least half of whom are full time, Wunderlich said. The starting hourly wage for employees there is $11.50 an hour, she said. All Costco employees – full-time and part-time – are eligible for a benefits package that includes medical, dental and vision insurance, she said.

She said the company, which has been selling business and individual memberships locally in advance of opening, has been well received in the community.

“Outstanding,” Wunderlich said. “It’s just been outstanding. We’ve been very successful with our pre-opening marketing.”

Competitive effect

Dorothy Harpool, an instructor at Wichita State University’s Barton School of Business who focuses on consumer behavior, said Costco will be most competitive with Sam’s Club.

“I’m not sure every consumer will want to be members of two clubs,” she said. “A lot of these families … they’re going to have to make a decision: Sign up for both or choose one.”

“It will be interesting to see if people go with the shiny new versus the club they’ve been a member of for 20 years,” Harpool said, adding that there will be some who will quickly shed their Sam’s membership for Costco just because, well, Costco is new.

Sam’s Club annual memberships start at $45 and go up to $100. Costco annual memberships start at $55 and go up to $110.

Kantar Retail analyst Sara Al-Tukhaim said in an e-mail to The Eagle that Costco “will pose a threat to Sam’s from a member acquisition standpoint because prospective members will now have more than one club to choose from.”

Shane Dickerson, Sam’s Club market manager for Kansas and most of Missouri, said his company is well aware of Costco’s entry into the market.

Dickerson said this is the fourth market he has managed for Sam’s Club, and he has overseen other markets where Costco has opened.

“It makes us better,” he said. “It makes us stronger. It makes us fine-tune our business.”

He said Sam’s Club has increased its marketing efforts locally, and pushed to increase its membership, and as a result the company has seen some “good growth.”

“We can’t take for granted 30 years of just being there,” Dickerson said.

Al-Tukhaim also said Costco has a stronger shopper overlap than its competitors with other retailers such as Target and Trader Joe’s.

“It’s very low prices per unit, and its incredibly compelling shopping experience will pose a threat to those retailers whose shoppers in particular are more affluent and looking for the best deals,” Al-Tukhaim said in the e-mail.

Officials from Target, which operates three stores in Wichita and one in Derby, did not respond to requests for comment.

Harpool said she thinks there will be a lot of broad interest in Costco’s opening here.

“Costco gets a lot of press, national press, so people are aware of that brand,” she said. “I think there’s going to be a lot of intrigue.”

Reach Jerry Siebenmark at 316-268-6576 or jsiebenmark@wichitaeagle.com. Follow him on Twitter: @jsiebenmark.

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