How to Beat Costco D.C. retailers can compete. Here's how.

Emily Flake

Has anyone ever emerged from a Costco and not gotten into a vehicle?

Certainly not if they’re coming from the District. Here’s how that goes: You get in your car, cross a bridge, travel along an expressway, enter the megabox wholesaler’s overcrowded parking lot, hunt for a space, hunt for a shopping cart, squeeze elbow to elbow through over packed aisles, fling oversized packages of toilet paper/bottled water/boneless-skinless chicken breasts around, join an interminable line, fish through a steel bin for cardboard boxes to carry your stuff, get your parking ticket validated, load your stuff, return your cart, inch out of the overcrowded parking lot, get back on the expressway, cross a bridge, and then double-park your car while you unload your oversized bundles of toilet paper/bottled water/boneless-skinless chicken breasts.

As you rush in and out of your place, traffic piles up behind your car. People start honking. Dog walkers stop and gawk. Now that’s city living, right?

Not by the textbook. In theory, the city is about the human scale, spaces and places that serve people rather than corporations. It’s about the livable and the walkable. It’s about community, being part of an enterprise bigger than yourself, but not too much bigger than yourself. It’s about sacrificing what’s easy and what’s cheap for a more satisfying way of living.

All of that is perfectly incompatible with mass quantities of goods at low, low prices—which appeals to suburban drones and urban explorers alike, accounting for the typical surfeit of District of Columbia license plates angling for spaces in the aforementioned overcrowded parking lot.

Face it: People of fairly progressive outlooks on matters of sustainability, smart growth, living wages, corporatism, and the like still trek out to Costco. What it lacks in succor to the urban liberal’s mindset, it makes up in convenience, savings, and—face it—spectacle.

How many dollars do the independent merchants of the District lose to Costco each year? Gotta be well into the tens of millions. Think about it: How much did you pay the last time you went to Costco—$200? Five hundred? The Census Bureau estimates that there’s 249,996 households in the District; say 20 percent are bulk wholesale shoppers. Even at the modest spending level of $500 per year, that’s more than $25 million in spending escaping the District (not to mention hundreds of thousands of dollars in sales tax revenue).

Those numbers, imagined though they may be, constitute a crisis for D.C. retailers. There has to be a five-point plan, and it starts right here.

• Repeal all building-height limits. Every time someone talks about the District’s storied limitation on the height of buildings, they invoke the skyline or environmentalism/urban density. How about linking the much-talked-about repeal to the livelihood of the D.C. indie store? Think about it—what does Costco have that we don’t have? They’ve got square footage, and the difficulty of plopping a Costco-sized footprint in the District has helped keep the company’s stores out too long. Building up means more floors, more space, more room for those jumbo-size boxes of Cheerios and Jethro-type containers of Mott’s Apple Juice. And Costco’s reluctance to embrace the multi-floor layout would leave an opening for mom ’n’ pop.

• Slash prices. Clearly the number one draw for Costco is the low markups. Take my closest grocery option, the Best U Supermarket on the 1500 block of U Street NW. This place used to be your run-of-the-mill ghetto grocery, big on the package trade. In recent years, the owners have transformed the place into a yuppie shopping mecca, complete with imported pastas, Scandinavian crispbreads, artisan butters, and microbrews galore. While some folks will be buying those $7 boxes of raisin bran, I am not one of them. So go low to maintain volume! But no need to sacrifice the profit margins, retailers. Just embrace another Costco standby: The membership fee! After all, while at Costco, how often, as you behold that $12 case of Miller Lite, do you remember to amortize your $40 a year into the purchase price?

• Cut back on the selection. I love to buy clothes at Costco. Not because it’s convenient—not without dressing rooms or even a single mirror. Not because the stuff looks great—it’s generally high-quality, sure, but no one’s going to mistake Kirkland Select for Brooks Brothers. Not because it’s cheap—well, maybe because it’s cheap. But most of all, because an indecisive person can stroll in looking for a white button-down shirt, find the white button-down shirt bin, and get the hell out in seconds. No needless prolonging of the product choice experience. Same goes for cereal, bread, clothes, detergent, etc.

• Check receipts at the door. One of the essential moments of a Costco trip is when the drone checks your receipt against the items in the cart. This is such an amazing service that the retailer offers. As they say, they just want to make sure that you’re getting everything that you paid for. Now, how many D.C. retailers deploy a worker just to make sure you go away whole? Hiring such checkers is just the most obvious first step for city businesses to close the Costco gap.

• Cheap snacks. The stresses of navigating the Costco labyrinth are almost wholly offset by the $1.50 hot-dog-and-soda special on offer at the snack stand. Talk about a quality product at a good price: The all-beef franks are delightfully meaty and come on a nicely steamed bun. If a retailer’s unwilling to sling wieners personally, simply recruit a downtown half-smoke vendor to set up shop outside.

• Improve the transportation experience. Sure, you can locate yourself right next to a Metro station or multimodal transit hub or whatever, but the sort of bulk purchasing that people want from Costco is pretty much incompatible with mass transit. At the same time, the free-for-all that is the Pentagon City Costco parking lot isn’t going to cut it. So how ’bout IKEA-style delivery? A Zipcar lot onsite? Or maybe with a $100-or-more purchase, you get a free ride home within city limits. For those driving themselves, there’s gotta be parking, sure, but how about one of those cool automatic free-space light systems like they have at BWI now? That’d be great.

And here’s a kick in the ass for you local retailers: Costco’s not going to stay away forever. The Washington state-based company is becoming increasingly attracted to urban consumers. Just this month, it opened its first store in Manhattan, hard up against the East River in Harlem. The shelves are stacked a little higher, the aisles are a little narrower, the product mix is a little different (not so much on the patio furniture, for one).

Sure, retailers there are figuring out how to coexist with the behemoth around the corner. A local TV station did a piece where a retail analyst predicted death for Harlem’s bodegas. Then the station interviewed an actual bodega owner, who said he’d taken to stocking his shelves with items he purchased in bulk from Costco.

There’s an example of if-you-can’t-beat-’em-join-’em defeatism if I ever saw it. Time is ticking for the little guys: Developers for several years have tried to lure the company to a site off South Dakota Avenue NE near Fort Lincoln. Before a deal gets done, you can eat Costco’s lunch.

Don’t think outside the box. Be the box!

Our Readers Say

I have been saying this for years. Before we had a Target in the District, I would shlep to Virginia to shop for pretty much everything including groceries and an occassional Costco stop. I have spent most of my shopping dollars in Virginia and DC can't realy aford to continue lossing these revenues. Wake up DC!
I always emerge from Costco and not get into a vehicle. It imposes shopping discipline when you're taking your purchases home in a folding shopping cart and a backpack on the Metro. But I've never seen anyone else try it.
I almost always take METRO to Costco. I have a folding cart (old lady cart) and use that with ease. There is a lot of stuff that grosses me out about Costco, even thought I'm a life-long Costco consumer. However, they offer post-consumer recycled unbleached TP, organic milk and yogurt (there is some controversy about their organic milk and Aurora dairy it should be noted), organic quinoa, Lara bars and other good products. There is often less packaging involved, altough sometimes more. So yeah, I'll keep going for certain things. Don't forget the enormous bottles of wine!
Good to see some focus on this. I disagree with some of your bullet points though.

1) Receipt-checking - I always saw that as a theft-prevention method for the store since they don't use (more expensive) magnetic tags. It's inconvenient because it adds an extra line customers have to wade through, but I put up with it because I know retailers lose a ton of money to shoplifting every year and decreasing that keeps prices down. Adding that in DC stores would not make me more likely to use them.

2a) the "kick in the ass" -- Costco offers wholesale prices, and if you have a valid business ID, you can buy supplies tax-free for the same price you would order them from a supplier. You get the supplies that day, and you don't have to pay for shipping. For a small-scale retailer who doesn't get bulk corporate discounts, it may make more economic sense to get supplies that way. I know; I used to do that when I sold retail.

2b) Target markets and competition -- Costco's business model targets people who sacrifice convenience for price; inner city corner-stores target people who sacrifice price for convenience. That's why Target has not driven downtown CVS "pharmacy" grocery stores out of business - they go after different markets. This appeal to my schedule over my wallet is the same reason I shop at the dingy, poorly-managed, higher-priced Safeway down the street from my apartment for most things and only make Costco runs every few months -- and sometimes grab an overpriced candy bar at the CVS downstairs.

While I'd love to see Costco (and Costco's tax revenue) or another quality bulk retailer in DC, really the only thing it would change in my shopping habits would be location -- I'd use the closer Costco when I needed to go.

Even more than that, though, I'd also love to see more diverse retail in downtown DC. I wish the DC council would provide a better environment for local businesses instead of focusing so much on bringing in national, proven chains like Target, CVS, Corner Bakery/Cosi/Au Bon Pain/Starbucks, and the other ubiquitous chains we have here...
This guy's been drinking the Costco Kool-Aid. No doubt it cost him two dollars per 40-liter drum.

Is it just me or is this thing full of holes, contradictions and half-argued points?

The comment above mine does a quality if only partial job of picking this list apart.
Haha. Commenters are taking this guy seriously!
My local corner market in capitol hill also stocks their shelves with items from costco
I rarely shop at Costco but on the other hand I do all of my shopping, food or otherwise, either in MD or VA. Not to mention on the Internet. I dont even go to the DC Target because of the crowds and young unruly kids that hang out there. DC needs to wake up and provide more real shopping with parking lots! I am not schlepping my purchases on Metro....
Costco rules. Folks do come on the metro like I do occasionally. Yesterday, I followed a man to the metro from Costco Arlington with a large rolling suitcase stuffed with groceries, clothing, and a couple of electronic gadgets (he had been in front of me in the checkout lane). For a real box bonanza, visit the Costco in Sterling VA, a new store with cheap Costco gas too. Within a half-mile, there is a brand new Super Walmart (groceries), a Loew's and a Sam's Club. Especially handy if you're going to Dulles for any reason. Search for Dulles Crossing Plaza, Sterling.
costco will be here in a short time:
this article just made me feel dumb for getting halfway through before realizing it's either not serious or completely uninformed. greeters & hot dog sales in the corner store, yeehaw!

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