Costco drawn to area by demographics

Costco drawn to area by demographics

March 12th, 2010 by Andy Johns in News

Representatives from Costco Wholesale said they have been looking to get into the Chattanooga market for five to seven years and chose the Fort Oglethorpe location because of its proximity to Interstate 75.

Speaking to the media for the first time since Catoosa County's Feb. 19 announcement that the warehouse club would build off of Cloud Springs Road, representatives said the demographics of the Chattanooga area attracted their attention years ago.

"It's definitely a market where we should be," said Roger Campbell, Costco's senior vice president for the Southeast.

Until about a year ago, Costco was considering at least three sites, including two in Hamilton County, according to Joe Kucharski, a broker with Northwest Atlantic, Costco's exclusive real estate broker.

Mr. Campbell said the location allows the store to serve the entire Chattanooga area, but also tap into Dalton, Ga., more than a store across the state line would have.

Georgia's lower sales tax and Tennessee's laws prohibiting wine sales at grocery stores also played a minor role in the company's decision, he said.

"The most important thing for us is the right location," he said.

With the easy interstate access, the store could bring in above-average sales and generate more than $135 million in income annually, he said.

"It's basically demographics," Mr. Kucharski said. "It's a good location that can reach the entire Chattanooga (Metropolitan Statistical Area)."

The club will be a full-sized store offering all of the departments that other Costcos do, he said.

Mr. Kucharski said Costco was looking at other locations in Georgia, Tennessee and Alabama, but could not comment on any other negotiations.

"Costco is very conservative and methodical in its expansion," he said. "A lot of pieces have to fall into place to make a deal successful."

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