Costco takes another bite out of the Big Apple with NYC store

NEW YORK A trickle of patrons turned into a swell Thursday morning as Costco opened its first store here in Manhattan.

The Issaquah, Wash.-based membership mass merchandising chain opened its doors in a ribbon-cutting ceremony at the new East River Plaza development in East Harlem. The store is the fourth in New York City, after the stores in Brooklyn, Staten Island and Queens.

One of Costco’s main challenges came from building the store in an urban setting. Most of the chain’s U.S. stores lie in suburban in rural areas, as opposed to the densest city in North America, in a building shared with Target, Best Buy and Marshalls. While a typical Costco store is more than 140,000 sq. ft., the Harlem store is about 110,000 sq. ft.

“It’s a challenge relative to the size,” Costco CEO Jim Sinegal told Drug Store News. “We had to crowd a lot in and configure it differently.”

One way the store saved space was to trim down some of the products, particularly those that would not be suitable for most New Yorkers, such as patio furniture and larger packages of such products as pet food.

“We’ve probably come down a little bit on the bulk items,” EVP and CFO Richard Galanti told Drug Store News. “With that exception, we’re trying to offer the full breadth and depth of what we typically offer.”

Early on, another challenge came from elected officials, such as Democratic Rep. Charles Rangel, who represents the neighborhood, and New York state attorney general Andrew Cuomo. They had criticized Costco for building the store in Harlem, a largely low-income neighborhood relative to the rest of Manhattan, despite the chain’s longstanding policy of not accepting food stamps. In response, the company had initially announced, in May, that it would accept food stamps at its New York stores, through a pilot program, but ended up announcing in late October that it would accept them at all its stores nationwide.

Despite deviating from the usual store configuration, however, the store’s prices are the same as in other Costco stores.

“I think that’s a novelty for Manhattan, right there,” Sinegal said.

The store’s location in Harlem has led it to serving the neighborhood’s many Spanish speakers.

“One of the things we do is have plenty of Spanish-speaking employees,” regional pharmacy manager for the Northeast Tom Drougas said. “That’s always a plus.”

As required by state law, the pharmacy has Language Line, which allows speakers of numerous languages to receive translation services from trained staff over the telephone. Customers can also consult with staff through the pharmacy’s patient consultation window or in the private consultation room, which includes a DVD player allowing patients to watch videos about disease states.

Other cultural communities are served as well. For example, the store is one of the few in the chain with a section for kosher foods.

“I think it’s big in the right places and small in the right places,” general manager Rob Coope told Drug Store News.