Costco may soon be coming to a mall near you
Costco is just one of several large-sized retailers planning to take advantage of all of that empty real estate at malls across the country and start opening up shop. The warehouse club said it plans to open three stores at shopping malls, two in former department stores and it's looking to expand into even more locations, Costco co-founder and chairman, Jeff Brotman, told the Wall Street Journal.
"Big box retailers like Costco and Walmart would usually never consider going into a closed mall environment and vice versa. Most malls would never allow them in," says Malachy Kavanagh, spokesman for the International Council of Shopping Centers. "But now with the decline of the department store industry.... " Yes, these days it's most definitely a different story.
With retail vacancy rates near 11%, malls are desperate to fill space. Retailers can now demand concessions, like lowering the cost of what is usually a higher rent property than a strip mall (those common areas of the mall have to be maintained, and all the tenants share the costs much like homeowners association). Retailers like Target, Walmart and Costco can negotiate better rates for a long-term leases, and don't have to battle communities that don't want the disturbance that comes with a new warehouse-sized store.
There's a bright side for shoppers though: the local mall may look less like a ghost town and gain a new lease on life from the traffic these big anchor stores can attract. Plus, says Kavanagh, you can drop the kids off at the mall, and get your own shopping done.
Costco did not return calls requesting more information.