Costco's loyal following finally getting a store in the Springs

For Costco Wholesale Corp., the nation's fourth-largest retailer, the secret to success is simple.

"There are no trick mirrors here,” said Jim Sinegal, president and chief executive officer of Issaquah-Wash.-based Costco. “It's just great products with great prices."

It's that philosophy that has built a loyal base of customers in Colorado Springs even before the city's first Costco membership warehouse opens Wednesday on the east side of town.

“When I found out Costco was opening here, I was thrilled,” said Diane Torrence, a self-avowed “Costco groupie.” She's been a member for 15 years, first joining as a single teacher right out of college in California. When she moved from the Washington, D.C., area to Colorado Springs last summer with her husband and their four children, she was devastated to learn the closest Costco was 60 miles or so away in Denver.

She still got her Costco fix, driving to Denver every month or so. Now Costco's just a couple of miles away.

Costco's bakery, Torrence said, “is to die for.” She loves the store's “ready to cook” meals — salmon, chicken enchiladas and other dishes she can toss in the oven to finish. She's found good deals on appliances, dishware, clothing, books and 40-roll packages of toilet paper.

“It sounds silly,” she said, “but I really like their toilet paper.”

For those yearning for a Costco here, it has been a long wait. The company said in 2003 that it wanted to open a store in the Springs. In 2005, it announced plans for a store northwest of Nevada Avenue and Austin Bluffs Parkway that would open the following year.

In 2006, with that project stalled, Costco announced it would open a store along booming Powers Boulevard on the east side. The original site, meanwhile, is expected to open in summer 2009.

The Springs Costco will be the ninth Costco warehouse in Colorado. Groceries, appliances, automotive supplies, housewares, toys, furniture and office supplies are just some of the merchandise that will be found in the 158,000-square-foot warehouse.

“It's just a fun place to shop, I think, because they have just everything under the sun in one store,” said Gloria Chandler.

She and her husband live in Monument. Since her husband works in Denver, “he goes to Costco and does all of our shopping on his way home from work,” Chandler said. With the store opening in the Springs, she'll take over the shopping.

“I can't wait,” she said.

Costco's main rival is Sam's Club, which has two locations in Colorado Springs. Sharon Klain of Colorado Springs dismisses Sam's Club as “a wannabe Costco.” Costco's customer service and quality of merchandise, she said, “far, far surpass Sam's Club.”

Ceacy Thatcher of Woodland Park also sees a difference between the two chains.

“My mom would probably never set foot in Sam's,” she said. “Somehow Costco has a cachet that doesn't say big box.”

Thatcher raves about everything from Costco's French onion soup to its dog food. But she has one caution for Costco newcomers.

“The big thing about Costco is, if you see something you like, you buy it. Things just sell out so quick.”

That's the “treasure hunt” aspect of Costco, with many one-time, limited-availability items zipping in and out of stores.

“It's like, ‘What am I going to find today?' ” said Charles Chaves, a Monument man who has been a Costco member for years.

Costco shoppers also shouldn't get attached to any brands other than Costco's own Kirkland Signature brand. Costco's constant search for deals means many brands come and go.

"We're seeking the best value that's out there," said Sinegal, who plans to be at the Springs opening. "So if there is a great value on a particular brand of peaches, that is the one we're going to carry."

Costco's maximum markup on merchandise is 14 percent, and "a lot of products don't come close to 14 percent," Sinegal said. By comparison, supermarkets commonly mark up merchandise by 25 percent and department stores by about 50 percent.

Costco also keeps costs down with its no-frills approach. It doesn't have a public relations department, for example; Sinegal deals directly with the press. And Costco doesn't advertise except for direct mail.

One area where Costco doesn't scrimp is with its employees. The company, described in a New York Times story as "the anti-Wal-Mart," is known for providing good wages and benefits. The Springs store will employ 190.

"I have found talking to the employees that Costco, the company, treats them well," said Costco member Grace Buhler. "I think any time a company treats their employees well, it really shows in the way they treat the customers."

Bob Stetler can confirm that Costco treats its employees well. His youngest daughter works for Costco in Houston.

Stetler has several reasons for being happy that Costco has arrived in the Springs. He is the owner of L&L Hawaiian Barbecue, located in the shopping center across Barnes Road from the new Costco.

"We will be able to purchase many food, paper and cleaning items for the restaurant by just driving into their parking lot from ours," Stetler said.

And the crowds that flock to Costco should help his business, too, he said.

"The increased traffic on Barnes Road is going to be great for us as well as other businesses near by."