Excellent piece in the Seattle Times about Costco’s busiest store – the Iwilei store in Honolulu, Hawaii, ringing up $300 million in sales a year, more than twice what the average Costco warehouse generates. “While the chain boasts other high-octane warehouses, this site has been No. 1 for the last 19 months,” the Times writes. “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.”
The Times also notes that “in Hawaii the demand is more pronounced because of the value it offers residents. James Wills Jr., a marketing professor at the University of Hawaii Shidler College of Business, says land and manufacturing here is so scarce that it drives up the cost for everything from milk to cars to shoes. Costco was the first retailer to fill that vacuum, offering goods at prices locals hadn't known before. The company caps its markups at 14 percent regardless of product or location, although freight is added to the prices in Hawaii.”
“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.”
The Times also notes that “in Hawaii the demand is more pronounced because of the value it offers residents. James Wills Jr., a marketing professor at the University of Hawaii Shidler College of Business, says land and manufacturing here is so scarce that it drives up the cost for everything from milk to cars to shoes. Costco was the first retailer to fill that vacuum, offering goods at prices locals hadn't known before. The company caps its markups at 14 percent regardless of product or location, although freight is added to the prices in Hawaii.”
- KC's View:
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The Times story is especially good because it looks at the Hawaii Costco through the eyes of the company’s CEO, Jim Sinegal, who is seen visiting the store with his grandson. While Sinegal, notable for being anti-celebrity, doesn’t like to talk about himself, the way the Times describes him is worth paying attention to in an age when so many CEOs think of themselves – and pay themselves – like rock stars:
“His oft-cited mantra: The media turns CEOs into superheroes, when in reality, it takes more than one talented person to run a company. Even so, the public fascination with Costco — and Sinegal — stems partly from his maverick ways. At the company's Issaquah headquarters, Sinegal's office is an open space with no door. His desk is pushed up against the wall so that, at first glance, he appears to be someone else's secretary. Behind his desk is a montage of employee photos. (On one occasion, his annual financial goals were push-pinned to the wall like a grocery list.)
“The company, with $59 billion in sales last year, has no public-relations manager, let alone a PR machine. Whereas far smaller public companies surround the CEO with layers of impenetrability, Sinegal answers his own phone, usually on the first ring.”
