Costco Passes on Tri-Cities (Johnson City, Kingsport: real estate, incomes, club)

[Rangerred]

https://www.wjhl.com/news/local/cost...=facebook_WJHL

Can't say I'm surprised but it is disappointing...

[sprintuser2014]

Originally Posted by Rangerred

https://www.wjhl.com/news/local/cost...=facebook_WJHL

Can't say I'm surprised but it is disappointing...

Costco has passed on this area multiple times due to a lack of population and income. This is not news at all.

[jjbradleynyc]

Originally Posted by Rangerred

https://www.wjhl.com/news/local/cost...=facebook_WJHL

Can't say I'm surprised but it is disappointing...

Yeah, disappointing for sure. The area on the whole as one metro, does not earn enough average income for a COSTCO.

Per capita income is $26k/annually (2017)
Median household income is $42k/annually (2017)

https://donfenley.com/2018/09/13/new...ance-declines/

That's a big reason why a lot of brands and chains do not have a presence here, the income overall is a bit lower than a lot of areas.

[Serious Conversation]

It's disappointing and a big letdown to get a flat "no."

The bottom line is that this area generally cannot attract the middle to upper middle class retail that is so common in the rest of the country. We have three Belks, but not one higher level department store. Dick's is in every city. We have so many redundant stores, but not much choice when you get right down to it. Johnson City and now Bristol are obviously doing better than Kingsport, but there is still little to nothing here for the middle to upper middle class.

With Costco declining, that should be a hard stop for the Boone's Creek development. If they can't get Costco, they won't get any of the other stuff we've mentioned. Why build it to shuffle what we have around? We're too poor, too spread out, and too small. More than that, we're tapped out on retail. We've hit the wall on what we're able to attract from big national chains.

It's not that this is just bad in and of itself, but it discourages people from areas where this kind of thing is common from relocating here. If you're having to give up a lot of stuff that is part of your lifestyle wherever you came from, this area becomes a hard sell.

[Page2]

According to a report on WJHL the company that handles real estate for Costco says the company is not interested in coming to the Tri-Cities. The firm looks for a minimum of 250,000 people in a trade area (30 minutes drive time). The company official said that in a market like the Tri-Cities, with 2 Sam's Clubs, that would require a minimum population of 750,000 in the trade area. The company also targets wealthier households and looks for above-average household incomes. "The income levels iun the region are lower when compared to other markets that we are considering," the company official told WJHL. "As a result, we have passed on the market." He added that Costco has been contacted many time over many years about coming to the Tri-Cities but the "region is not an area where we wish to expand."
If the truth be told I suspect a similar market logic could be applied to some of the other firms that keep appearing on the wish list for new firms.
The bottom line is we need to grow our population and household incomes to attract some of the outlets we'd like to see locate here.

[Serious Conversation]

Originally Posted by Page2

According to a report on WJHL the company that handles real estate for Costco says the company is not interested in coming to the Tri-Cities. The firm looks for a minimum of 250,000 people in a trade area (30 minutes drive time). The company official said that in a market like the Tri-Cities, with 2 Sam's Clubs, that would require a minimum population of 750,000 in the trade area. The company also targets wealthier households and looks for above-average household incomes. "The income levels iun the region are lower when compared to other markets that we are considering," the company official told WJHL. "As a result, we have passed on the market." He added that Costco has been contacted many time over many years about coming to the Tri-Cities but the "region is not an area where we wish to expand."
If the truth be told I suspect a similar market logic could be applied to some of the other firms that keep appearing on the wish list for new firms.
The bottom line is we need to grow our population and household incomes to attract some of the outlets we'd like to see locate here.

Agreed.

It seems that we have gone as far as we can go on the dining/retail chain business that we can given the population and area household incomes.

When you look at a median household income of $41,000, that's not a lot of money at all. A family at that income level is going to really struggle. They might not even have enough for that Costco membership.

The sad thing is that this is a vicious cycle. Companies from outside the area won't want to locate in areas lacking in amenities that their employees are used to and expect. It's difficult to attract talent for existing openings when you lose a lot of things.

[rccrain]

Originally Posted by jjbradleynyc

Yeah, disappointing for sure. The area on the whole as one metro, does not earn enough average income for a COSTCO.

Per capita income is $26k/annually (2017)
Median household income is $42k/annually (2017)

https://donfenley.com/2018/09/13/new...ance-declines/

That's a big reason why a lot of brands and chains do not have a presence here, the income overall is a bit lower than a lot of areas.

This is true, but honestly, there is a lot of hidden money in this area that is not going to show up in census data.

[rccrain]

Originally Posted by Page2

According to a report on WJHL the company that handles real estate for Costco says the company is not interested in coming to the Tri-Cities. The firm looks for a minimum of 250,000 people in a trade area (30 minutes drive time). The company official said that in a market like the Tri-Cities, with 2 Sam's Clubs, that would require a minimum population of 750,000 in the trade area. The company also targets wealthier households and looks for above-average household incomes. "The income levels iun the region are lower when compared to other markets that we are considering," the company official told WJHL. "As a result, we have passed on the market." He added that Costco has been contacted many time over many years about coming to the Tri-Cities but the "region is not an area where we wish to expand."
If the truth be told I suspect a similar market logic could be applied to some of the other firms that keep appearing on the wish list for new firms.
The bottom line is we need to grow our population and household incomes to attract some of the outlets we'd like to see locate here.

It sounds like they might have considered the area if there weren't already 2 Sams Clubs. I can see that logic but if they ever saw how swamped Sams is in JC, they might reconsider. This area is "wholesale club type people" and I have no doubt it could also support a Costco, especially in Boones Creek.

[sprintuser2014]

Originally Posted by rccrain

It sounds like they might have considered the area if there weren't already 2 Sams Clubs. I can see that logic but if they ever saw how swamped Sams is in JC, they might reconsider. This area is "wholesale club type people" and I have no doubt it could also support a Costco, especially in Boones Creek.

I'm skeptical if Costco would make it here with Walmart's everywhere and two Sam's Club locations. I'd love a Costco but we are too small, too poor, and Walmart/Food City pretty much own this area when it comes to retail and food.

[Beretta]

Link to the WJHL report: https://www.wjhl.com/news/local/cost...cities-market/