Costco in Hawai`i

[Leo Lakio]

The Seattle Times ran this story (http://seattletimes.nwsource.com/html/businesstechnology/2003790031_costcohawaii15.html) on the front page of today's Sunday paper, focusing on how the Costco in Iwilei is the busiest in the nation.

(Thought I'd post it here, as this was a localy-written story, and I don't know if it would be picked up for syndication to the Island newspapers.)

[pzarquon]

Good find! That was a great story. I had no idea Jim Sinegal came by so often, if at all. And I really liked how they balanced the amazing revenue generated here with many of the reasons why: high costs, multigenerational households. And the statistics:Nearly one in every four island residents — more than 190,000 — joined the club at this store. Tack on the other two locations — Waipio and Hawaii Kai — and half the residents carry a Costco card.

Iwilei is so busy, in fact, that it turns its entire inventory every two-and-a-half to three weeks — a logistical wonder considering most everything comes in by water. "My responsibility," Loomis says, "is to make you leave with something you didn't know about."And his visit to Sam's Club was a fun anecdote. I have yet to set foot inside of one!

[lavagal]

We're in a Costco once or twice a week. He's got a point about leaving with something you didn't expect to buy.
One thing they discontinued years ago: Spaghetti Os, but now my kids don't eat it any more. Spaghetti Os with meatballs is vile.
Recently they ran out of the Nature's Path Flax Seed Cereal with Pumpkin seeds in it. We were eating that daily. Then they ran out. I was told that they might get more in September. So what's the deal? Get Costco members hooked on something and then run out? I think that's wrong.

[tutusue]

Good find! That was a great story.[...]And his visit to Sam's Club was a fun anecdote. I have yet to set foot inside of one!
Great story, indeed. Thanx for posting the url, LL. Like you, PZ, I still haven't been inside a Sam's Club.

[Leo Lakio]

Like you, PZ, I still haven't been inside a Sam's Club.I have, but only as a performer (they used to invite our halau to come in and do shows at Christmastime, where the keiki would sell candy lei and a cheapo CD we made of holiday tunes, the proceeds going to Pacific Islander families in the PNW, who happened to be down on their luck that season.) I've had Costco memberships several times in the past twenty years or so, but haven't had one for quite some time now; I'm not really sure why not.

[Glen Miyashiro]

So what's the deal? Get Costco members hooked on something and then run out? I think that's wrong.Oh god, tell me about it. For me, it was those dried Fuji apple chunks they had a while back. Sooo good... and then they disappeared from the shelves and haven't been seen since. WTF?

I hear it's even worse at Trader Joe's, though. You never know what'll be on the shelf from week to week. :rolleyes:

[Glen Miyashiro]

The Seattle Times ran this story (http://seattletimes.nwsource.com/html/businesstechnology/2003790031_costcohawaii15.html) on the front page of today's Sunday paper, focusing on how the Costco in Iwilei is the busiest in the nation.Except that the reporter gave the pronunciation of Iwilei as "ee-VEE-lay", which sounds a little off to me. If I had to provide an English-equivalent pronunciation tip for outsiders, I'd have written "evil-lay". "Evil Lay" sounds rather sinister... but given the district's old "Hell's Half Acre" reputation, it might be appropriate. :D

[Leo Lakio]

I hear it's even worse at Trader Joe's, though. You never know what'll be on the shelf from week to week. :rolleyes: Sadly, very true. However, many items that are gone one month often return the next, according to a couple of the clerks.
Except that the reporter gave the pronunciation of Iwilei as "ee-VEE-lay", which sounds a little off to me.I've heard it without much emphasis on any syllable, or a slight bit on the first - how accurate would that be?

[Glen Miyashiro]

I've heard it without much emphasis on any syllable, or a slight bit on the first - how accurate would that be?If you want to pronounce it in a Hawaiian-language way, then yeah, that'd be the most accurate. "Ee-vee-lei", with no clear emphasis.

[Palolo Joe]

If you want to pronounce it in a Hawaiian-language way, then yeah, that'd be the most accurate. "Ee-vee-lei", with no clear emphasis.

Which is pretty much what the reporter wrote. And how I pronounce it.

Lei = Lay

To a haole, anyway.

At least she got "aloha shirt" right, instead of calling it a Hawaiian shirt.

And lets not get started again with Hawaiian vs. Hawaii resident.

Overall, good story. Too bad Erika didn't get a chance to hang out. Guess that's what happens when there's no PR department... hometown media gets the breaks.

Must have been a great assignment to get: Fly to Hawaii and cruise with the boss from Costco. Tough gig. :p

[tutusue]

Sadly, very true. However, many items that are gone one month often return the next, according to a couple of the clerks.[...]
I've heard, 4th hand that wholesale price dictates whether or not a product stays. Don't know how accurate that is, tho'. I would think that a product's popularity (or lack thereof) might also have something to do with it. And, it's availability!!! Come to think of it, I have no idea why Costco has some products for awhile then either no longer carries them or carries them sporadically. :rolleyes:

I miss the jars of diced, dried tomatoes. They continue to carry the sliced kine but I'm too lazy to chop 'em up! :o

[Leo Lakio]

FWIW, the article's author is Japanese-American, a native of New Mexico. Also, this might be her big farewell article for the paper, as she is moving to L.A. for a job in the publications department of a lay Buddhist organization centered on the promotion of peace culture and education.

[pzarquon]

Bringing in gems, only to take them away, is certainly part of the business model. But yes, I too have heard that wholesale prices are also key to staying in Costco's stores. If I recall, Costco is like Walmart in at least one respect: they play hardball with suppliers. And if manufacturers can't give Costco the price that Costco independently determines that they should be able to swallow, they get dropped.

This may or may not have come up when I complained about the sudden disappearance of their Kirkland (the Costco store brand) avocado-extract body wash. I still miss that stuff.

Here's a post on another forum (http://www.avsforum.com/avs-vb/showthread.php?p=7859945&&#post7859945) that speaks a bit to this strategy:My wife used to work for a company (not electronics) that was a supplier to Costco. Costco has VERY strict requirements for packaging and labeling - for example, the Costco product number MUST be visible on the outside of the package. They also use their considerable volume to force unique product changes for a variety of reasons - consumer research, price points, bundles, etc. Most suppliers end up with a unique model number for the Costco product because it IS different than what they sell anywhere else. Costco plays extreme hardball with suppliers - if you want to do business with them, you do it their way or not at all. In return, they can offer you outrageously large volumes - it is absolutely incredible how much product they can move.

Unfortunately, Costco is also very well known for having absolutely zero brand loyalty - if they can find a competing product for a few cents cheaper, you are gone - no matter how much business you have done together in the past. They are brutal business partners.

All this adds up to being very good for us (the cheap b@stard consumers) - and also explains why you see products show-up at Costco and then suddenly disappear.

[cezanne]

I went to the Iwilei and Waipio Costcos looking for another Caravan brand instant canopy (better than the EZ-UP one at Sam's). Anyway they said that its sold out and they wont be bringing in anymore because theyre getting ready for Christmas! I started getting a panic attack... not because they didnt have the tent but because he made it seem like Christmas was right around the corner.

Costco Hawaii Kai had them tho. They had like 15 or so... they won't wont restock either... fwiw.

[tutusue]

Unfortunately, Costco is also very well known for having absolutely zero brand loyalty
What they do have is customer loyalty. I appreciate that. I wonder if it's possible for a business like Costco to have both brand and customer loyalty.

[Pomai]

Some good points have been made here about Costco's hardball stance on doing business with their suppliers.

The mention of them having zero brand loyalty is a tough one to swallow. There must be some point where customer demand for specific products (as reflected here) would have more leverage than the bottom line: price. Of course, Costco can pass any price increases on to the customers, but they're also driven at keeping their public reputation as the lowest price in town for the highest quality product, which is the core strategy of their business model.

It's a tough business. I'm sure manufacturer reps must cringe at just the thought of walking into Costco's merchandising office. Like going to war. :eek:

I've got an aunt in Alaska who used to package and sell smoked salmon at the Anchorage Costco. She too got ousted by a larger supplier who offered them a lower price.

[Frankie's Market]

The mention of them having zero brand loyalty is a tough one to swallow. There must be some point where customer demand for specific products (as reflected here) would have more leverage than the bottom line: price. Of course, Costco can pass any price increases on to the customers, but they're also driven at keeping their public reputation as the lowest price in town for the highest quality product, which is the core strategy of their business model.

It's a tough business. I'm sure manufacturer reps must cringe at just the thought of walking into Costco's merchandising office. Like going to war. :eek:

It pretty much is a battle, the relationship between wholesalers and retailers. Not just at Costco, but any store. If you're a local Kona coffee distributor, you really have to fight for shelf space at Long's or Don Quijote.

But at Costco, the ante is upped. They're not interested in carrying a few boxloads of a certain product just to keep a few customers happy. They're only interested in bringing in pallet loads of product where the sales volume and the profit margin are sufficiently high.

Complain to a manager about the absence of StretchTite plastic wraps, he won't care. (Not that there's much he can do about it.) He'll just tell you to buy the Kirkland brand or whatever else they may be carrying at the moment. It's the nature of their business.

[adrian]

Wait, so costco only has 30lbs of rice? where's the 50lbs or 75lbs?

(that has me thinking, where can you buy the largest amount of something say, rice?)

[buzz1941]

What's the deal with those squishy surfboards at Costco? Are they rideable?

[LikaNui]

What's the deal with those squishy surfboards at Costco? Are they rideable? I haven't seen the ones at Costco, but I do know I've seen squishy boards at some of the surf shops. Supposed to be safer than fiberglass boards.
I think they use them on Waikiki Beach to give lessons to beginners, too. The squishy boards are wider and thicker, ergo more stable for the balance-challenged.
I'd like to try one sometime, just for something different.

[joshuatree]

Wait, so costco only has 30lbs of rice? where's the 50lbs or 75lbs?

(that has me thinking, where can you buy the largest amount of something say, rice?)

Chinatown, 100 lbs rice.

[lavagal]

What's the deal with those squishy surfboards at Costco? Are they rideable?

I got one for my girls, but we haven't taken it out yet. I don't surf in a kid-friendly spot and I sure don't want to take them to Waikiki. Maybe Cockroach Bay.

I learned on a soft board. A giant Morey surfboard. We used to call it the Maxi Pad.

[tikiyaki]

I hear it's even worse at Trader Joe's, though. You never know what'll be on the shelf from week to week. :rolleyes:

Affirmative. As I as reading your post, I was saying, "man, that's the same way it is at Trader J........." then laughed when I got to the last part of your post. Very annoying when they run out of stuff I like.

[salmoned]

I've seen Trader Joe's in California, where stay Hawaii?

[Leo Lakio]

I've seen Trader Joe's in California, where stay Hawaii?None to be found. They've stated that they aren't interested in moving into Hawai`i. Good news for those of us who raid TJ's for omiyage to take to Hawai`i.

[Pomai]

None to be found. They've stated that they aren't interested in moving into Hawai`i. Good news for those of us who raid TJ's for omiyage to take to Hawai`i.This brings to mind the trend of Hawaii folks bringing back Beef Jerky for Omiyage from Las Vegas, which is explained thoroughly here (http://starbulletin.com/2001/09/12/features/story3.html).

See the 'Omiyage Ideas (http://www.hawaiithreads.com/showthread.php?t=3874&highlight=omiyage)' Thread for more on that subject.

[koloagirl]

Aloha from Kaua'i!

My hubby works at Costco here and you are right -- don't get addicted to something that they have this week -- because next week they might not have it anymore!

Prices are 100% what dictates what brands/items they sell -- if they have a good deal on something they'll carry it -- but it may not be that way next week or month.

I know that in order to bear the "Kirkland" label -- the product has to be (according to Costco) at least the same quality as the original product -- hence the virgin olive oil in particular at Costco under the "Kirkland" label is supposed to be excellent -- I use it but I'm not a foodie an wouldn't know the difference! Same with the "Kirkland" label Starbucks coffee -- it is actually roasted by Starbucks, not their beans, but Costco says it is the same quality or better than Starbucks - which they also sell (albeit for a much higher price) -- I've had both and honestly they are pretty darn close to me!

Their marketing strategy is pretty interesting -- also if you notice they move products around the store all the time -- you can't depend on something being in the same location this week as last -- they do this so that the traffic is constantly all over the store, not just in certain sections. It is so frustrating to try to find chips for instance that last week were over by the rice, and this week are over by the bakery! That's just their thing.

Malama Pono,
Janet