Earle KimelSarasota Herald-Tribune
Show Caption
NORTH PORT – While the new 157,000-square-foot Costco Wholesale warehouse that opened in North Port Wednesday at 11700 Mezzo Drive is the third store in the Sarasota-Manatee area for the Issaquah, Washington-based company, it could be a while until this area sees a third.
Tara Coltman, Southeast Regional Marketing Manager for Costco, said at Wednesday’s grand opening that there is a maximum number of sales that each store can handle.
Naturally when that sales volume is reached, the publicly-traded company will look to expand.
With that in mind, here are some things to know about Costo.
What development is planned near Costco between West Villages Parkway and River Road?
Heading east on Tamiami Trail from downtown Wellen Park, it’s hard to miss several commercial buildings already taking shape between West Villages Parkway and the roundabout at Mezzo Drive. One of the most striking is the new Advocate Radiation Oncology facility that is open at 8026 S. Tamiami Trail and shares a campus with a new Millennium Physicians Group office complex.
West of that, Sarasota Memorial Health Care System is eyeing a groundbreaking in 2025 for a planned free-standing emergency department that could eventually expand into a hospital.
Across Mezzo Drive from Costco is a large, cleared tract that will soon be home to a Heartland Dental practice and a Starbucks. There are two other sites where the developer is still negotiating with future tenants, noted John Luczynsi, chairman of the West Villages Improvement District.
When did Costco start?
Costco is publicly traded on Nasdaq under the symbol COST. While individuals and families can purchase Gold Star memberships to buy goods in bulk for personal use, the wholesale warehouses also offer small and medium size businesses the opportunity to buy goods in bulk for resale.
Business members pay an annual fee to shop for resale. Executive members can also save on auto and home insurance and earn 2% rewards on qualified Costo and Costo Travel purchases.
The corporation that became Costco started as Price Club in 1976 San Diego, California.
Following a merger, the first Costco opened in Seattle, Washington in 1983. It went online in 1995 with an information website and started selling online in 1998.
What's the deal with Costco's cheap hot dogs and pizza?
The Daytona Beach News-Journal took a close look at Costco's famous $1.50 quarter-pound all-beef hot dog and 20-ounce soda combo, along with a $1.99 slice of pizza, finding the chain has kept the price of its hot dog and soft drink combo the same since the food court menu item was introduced in 1985:
"The investor website Motley Fool last year published an article stating that Costcoshould be charging at least $4.25for the combo meal when factoring in inflation.
"The reason it doesn't is that Costco has effectively pledged to keep that $1.50 price point in place forever, or for as long as it's sustainable," the article stated, according to the News-Journal.
"In an interview in the early 2000s with the old King County Journal newspaper in Bellevue, Washington, Costco's co-founders, the late chairman Jeffrey Brotman and the since-retired CEO Jim Sinegal stated their intentions to never raise the price of the hot dog/soft drink combo.
The reason? The menu item had a personal sentimental meaning for Brotman," the News-Journal article detailed.
"His first entrepreneurial venture was a hot dog cart at the Seattle Center that he and his brother Michel briefly operated in the late 1970s. The name of their business was "Man Bites Dog."
"Brotman finally found success when he teamed up with Sinegal to found Costco Wholesale Corp. in 1983.
"Today, Costco is the world's third-largest retailer, behind only Walmart and Amazon based on 2022 revenues, according to the National Retail Federation.
"Costco's current CEO Craig Jelinek in a 2018 interview with a publication called 425 Business explained why he remained committed to keeping the price of the hot dog/soft drink combo unchanged: "I came to (Sinegal) once and I said, 'Jim, we can't sell this hot dog for a buck fifty. We are losing our rear ends.' And he said, 'If you raise the effing hot dog, I will kill you. Figure it out.'"
"Given that directive from his predecessor, Jelinek came up with a different solution by building Costco's own hot dog manufacturing plant (in Los Angeles) as opposed to using an outside supplier. "Now we are doing so much hot dog business that we've opened up another plant in Chicago," he said. The combo item now generates "enough money to get a fair return."
"Richard Galanti, Costco's chief financial officer,during a presentation to stock analystsof the chain's fiscal fourth quarter 2022 earnings, said the company has no intentions of ever raising the price of its hot dog/soda combo."
