Friday, October 10, 2014

Costco exploring possible Little Rock locations

Posted By on Fri, Oct 10, 2014 at 9:54 AM

click to enlarge COSTCO RUMORS: Talk of Costco interest in Little Rock focuses on the northwest corner of I-430 and Cantrell Road, land below the forest hillside visible in the distance at right. - GOOGLE STREET VIEW
  • Google street view
  • COSTCO RUMORS: Talk of Costco interest in Little Rock focuses on the northwest corner of I-430 and Cantrell Road, land below the forest hillside visible in the distance at right.

the warehouse retailer with a reputation for quality goods and a well-paid workforce, is apparently exploring locations in the Little Rock area.

I have no response yet from the corporate office, though such chains typically won't talk about the ongoing business of expansion opportunities. Nothing is on file at the Little Rock Planning and Development Office.

But reliable sources say a local development firm, Flake and Kelley, has begun meeting with city officials about the possibility. Hank Kelley said he couldn't comment on any clients he might be representing.

One site being discussed, according to other real estate sources, is residential property at the northwest corner of Cantrell Road and Interstate 430, along River Mountain Road. A zoning change would be necessary and undoubtedly would draw opposition.

I look forward to hearing more. For many years, Costco rumors have come and gone. This one is more solid than earlier versions. It would be great news in many respects.

I've written before (and also here) about Costco's enlightened employment practices — a huge wage gap over warehouse competitor Sam's (almost $21 an hour at Costco versus less than $13 at Sam's for full-time workers according to a recent Business Week report); an openness to unions; reasonable pay for top executives; good health insurance. It also has a broader, more upscale product line than Sam's, one reason it outperforms Sam's in profits.

The conventional wisdom once was that Costco might not want to take on Sam's in the Waltons' home territory. Another obstacle was Costco's significant business in wine and spirits. Grocery stores are not allowed to sell wine and spirits in Arkansas, except for native and small-batch winery products. This is one reason Trader Joe's passed up Arkansas, I've been told, but another reader says Trader Joe's now has outlets without alcohol. Sam's won a court case in Fayetteville that established a model Costco could adopt for a store in Little Rock with its full range of goods. It could build an adjoining store with a separate entrance for retail alcohol sales. It would be a separate corporate entity, but owned by the parent. It would be limited to one such operation in the state.

A Costco in Little Rock would be about more than greater choices for consumers and  good jobs. It would reverse the drain of Little Rock retail. With Target and Sam's and their like moving to developing regional centers in Saline and Faulkner counties, city sales could use a boost. A Costco would create a one-of-a-kind store in Arkansas that would bring some of those outlying suburban shoppers back into the city .

Apart from the land use debate, a Costco would be a win-win-win. Freeway exposure and proximity to higher-priced neighborhoods make the Cantrell/I-430 idea plausible. But neighbors, both residential and in office developments across Cantrell, might not see it that way.

The presence of a church nearby also could complicate the alcohol question at this site. That could push the hunt to North Little Rock or perhaps Southwest Little Rock.

UPDATE: As expected from Costco:

We are in receipt of your inquiry regarding a location in the Little Rock area. While we appreciate your interest, our corporate policy is to not comment on specific markets.

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