Gina Ondrusik of Woodbury has been waiting for Costco to come to town for more than a decade.
She joined the warehouse club a couple of years ago but the drive to Maplewood was “too far to go for a chicken potpie” and she let her membership lapse. On Tuesday, she returned to Costco’s new location in Woodbury to renew. “I’m thrilled they’re here,” she said
The store, at 7070 Tamarack Road, opens Wednesday and is the Seattle-based company’s largest in the Twin Cities. Next spring, the company will open a slightly smaller “business center” location in Minneapolis that is designed to serve small businesses and restaurants more than consumers.
“We’ve been looking for an acceptable spot in Woodbury since 1999,” said Don Christensen, general manager at the Woodbury store.
For years, the company and city of Woodbury couldn’t agree on a site. After finding the one on Tamarack Road in 2015, the company had to overcome concerns from the Ramsey Washington Metro Watershed District about its potential effects on a nearby wetland.
Ondrusik is one of thousands to join in the membership push taking place in the Woodbury store before the grand opening. More new members have joined in Woodbury than during any of the other new store openings in Minnesota, Christensen said.
“The Twin Cities is one of our most successful areas given its population and demographics,” he said. It’s the seventh Costco to open in the Twin Cities. Costco last opened a site in the metro in Burnsville seven years ago.
Costco remains a tough competitor for Sam’s Club, which has 14 locations in Minnesota compared to Costco’s nine. Overall, Costco has 744 worldwide locations and Sam’s Club has 650, but Costco’s sales in the last fiscal year of $118 billion were more than double Sam’s $56 billion. Costco employees typically earn more than $7 more per hour than those at Sam’s Club and experience lower turnover.
The two warehouse clubs are virtually identical in approach, although Sam’s charges $45 for a basic membership and Costco charges $60. They sell at low margins, often requiring members to buy in large sizes or quantities. Overall, the differences in selection are small.
“Costco is seen as being more chic,” said George John, a professor of marketing at the University of Minnesota’s Carlson School of Management. “Sam’s Club has the burden of being associated with Walmart while Costco has more upper-middle class demographic from the data I see.”
The Sam’s Club in Woodbury is wrapping up a major remodel with new features added such as a fresh island with sushi, seafood and meats, an expanded health and wellness area with an optical center, and a reinvented cafe with charging stations, premium coffee and smoothies. The club also added drive-through pickup lanes. Sam’s Club does not currently have plans for additional warehouse locations in the Twin Cities.
The Woodbury Costco, at 165,000 square feet, will have some departments — including wine, beer and liquor — that are larger than the chain’s other local stores. It also includes a pharmacy, eye clinic, tire center and gas station, but no photo lab. “The photo business is going online,” Christensen said.
Costco doesn’t have plans for any new clubs like the Woodbury location, but it will open its first small business center in the state in Minneapolis this spring.
At 150,000 square feet, it’s the same size as a regular Costco warehouse but without the bakery, packaged meats, tire center, pharmacy or optical departments. The refrigerated section is so large that people are provided jackets during the summer. “Our walk-in cooler has three temperature zones for meat, dairy, deli and produce. It’s 10,000 square feet,” said Rob Parker, vice president of Costco’s business center operation.
It’s open to any Costco member but aimed at those who operate small restaurants, food trucks and convenience stores. “We cater to businesses, but also households and groups having parties or events, as well as schools and booster clubs,” Parkers said.
Costco may add more business centers in the Twin Cities, but Parker said the company wants to see how the first one fares.