COSTCO IN DERBY

COSTCO IN DERBY

September 1999
Costco UK, part of a US chain which runs several retail warehouses across the country, is to set up the warehouse opposite Toys R Us. It would not be open directly to the public, concentrating on supplying trade, but membership would be available for individuals in certain groups such as public employees, including health workers and teachers. The company said 90% of its staff would be recruited locally. Plans include a 579-space car park and a bus and cycle lane link to Chequers Road. This fits in with the council’s plan for buses to divert and have shorter journey times to the city centre than using the A52.

In a report to councillors, director of development and cultural services Jonathan Guest accepted that 35% of sales would be to individual members but he said that Derby has only one large cash and carry warehouse whereas Nottingham has several. He added that there would be little impact on the retail centres that council policies are designed to protect. Councillors were recommended to authorise a legal agreement to restrict the use of the premises to a warehouse club. It would also require Costco to produce a green travel-to-work plan to encourage staff to use public transport, cycle or walk to work. Derby and District Chamber of Trade opposed the plans. Chief executive Brian Matsell said, “We regard this as Pride Park and we do not support any retail development on Pride Park.”

November 1999
Costco UK would concentrate on supplying traders, such as small businesses, and the membership would be available for people such as public employees, including health workers and teachers, but it would not be open direct to the public. The city council backed the scheme in principle, but could not give permission because the size of the proposed building meant that the application had to be referred to Deputy Prime Minister John Prescott in his capacity as Environment Secretary. The Government Office East Midlands told the council on Mr Prescott’s behalf that it did not intend to intervene, which cleared the way for the scheme. The site is owned by William Davis, of Loughborough, which has also submitted its own plans for a 16-screen cinema, nightclub, pub and casino at the Wyvern site.

July 2000
Costco UK store is set to open in October and will be the American chain’s 11th store in Britain. A typical warehouse employs about 150 when it opens, and up to 250 within three to five years. Derby is the company’s first warehouse in the Midlands, though it had been looking for sites in the city for years. “It’s a very good market for us,” said managing director Jim Murphy. “There are a lot of small to medium enterprises and these are our primary customers.”

August 2000
Francis Ball, trading director of Costco Wholesale UK, said, “We are very excited about opening in Derby, not only because it’s a great market with a large number of small businesses, but it’s also a great location with easy access. Our research show us there are plenty of skills in the workforce. We look for people with good levels of enthusiasm who want to take a pride in working with high-quality merchandise. We are very proud of promoting from within. It’s not uncommon for cashiers and receiving clerks to run warehouses in the future.”

October 2000
Thousands of eager shoppers have already signed up for membership of one of the biggest retail developments in Derby, and the Mayor of Derby, Councillor Ashok Kalia, will open the multi-million pound Costo discount cash and carry warehouse. The 135,000 square foot store aims to cut back on frills to keep prices low. For example, there is very little shelving so racks are used to store products on pallets. “We are able to achieve the pricing structure that we have by minimising costs such as labour used in stacking items by hand,” said managing director Jim Murphy. “We don’t advertise as a rule, other than when we open. We can’t satisfy everybody in the market and we don’t like to turn away business but these are just our rules.”

He said that membership already totalled several thousand with a combination of corporate and individual memberships. “We have a very big building but only handle about 3,800 best-selling lines across the widest range under one roof,” he said. These range from tyres to tomatoes, computers to carrots, cakes, meat, office supplies, wines (costing up to Ł200 a bottle), health and beauty aids, electrical goods and some clothing. “We guarantee everything we sell,” said Mr Murphy. “This also applies to the membership fee. If people are not happy, they can have a refund.”

The store has 155 employees recruited from more than 750 people who turned up at presentation evenings at the Wardwick Jobcentre in August. A special jobs hotline alone took 2,500 calls. Mr Murphy met workers at Pride Park Stadium to explain the company’s philosophies and the opportunities open to them. “I think we have a very good group of employees in Derby. They are enthusiastic, energetic and ready to go,” he said. Store manager Steve Macdonald said, “Some of our staff were long-term unemployed and are keen to show what they can do. As membership increases, we will need to take on more people, possibly another 100 over three years.”

Costco was founded in 1983, with the first British store opening 10 years later at Lakeside, Thurrock, in Essex. There are now 340 stores in seven countries, with 32m cardholders and worldwide sales last year totalled more than Ł21bn. Smallest and most expensive item on sale at Derby is a two-carat diamond pendant and ring costing Ł10,000 and the largest is a heavy-duty air compressor at Ł337. The company’s biggest-selling item is packs of 60 toilet rolls. The store will be open seven days a week.