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A new pair of shoes… And 36 rolls of toilet paper

Costco may be calling to a mall near you. The wholesale retailer, which is known for its spare, warehouse-style stores, are targeting large spaces left by department and other anchor stores.

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Bill Radke: Here’s something we don’t say this often enough: Some shopping malls around the country will soon get a major new tenant. Now, this name won’t be much of a draw for cruising teenagers.

Marketplace’s Adriene Hill reports it’s the parents that malls are hoping to attract with Costco.


Adriene Hill: Half-occupied malls have got to be among the most depressing places. It’s hard to want to spend money on a new pair of shoes, when empty stores are there to remind you that the economy is in trouble. Analysts say Costco’s move into malls makes sense for mall owners that need anchor tenants and Costco that needs space.

Patty Edwards: Real estate is a lot harder to get today than it has been at any time in the past.

Retail analyst Patty Edwards is with Storehouse Partners. She says especially in dense markets it’s been tough for Costco to find land and get the permits it needs to open new stores. At the same time, malls and their department stores have had some tough years.

Edwards: Every time another retailer reports, it’s almost like the line from “It’s a Wonderful Life”: “Every time you here a bell ring, an angel gets its wings.” Every time you hear a retail company report their earnings, they’re telling us that they’re closing more stores.

Neil Stern is a senior partner at McMillian Doolittle. He says there aren’t a lot of retailers out there that can fill major mall space.

Neil Stern: Because of places like Costco, people have been coming to malls less. So it’s a bit of a “if you can’t beat ’em, join ’em” strategy perhaps.

He’s guessing that other retail stores in the malls could benefit from the traffic Costco brings in. Plus, Stern says, Costco shoppers are exactly the sort of shoppers that retailers drool over.

Stern: They’re generally high income, they’re working, they have larger families.

The real question is whether those shoppers after loading up at Costco on toilet paper, frozen steaks and laundry detergent will have the energy or the money to keep on shopping.

I’m Adriene Hill for Marketplace.

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