Justine Griffin/Sarasota Herald-Tribune—The east side of Westfield’s Sarasota Square Mall is easily the busiest part of the shopping destination.
Cars pack a parking lot that spans the equivalent of a few city blocks toward the residences of Palmer Ranch, and shoppers inevitably head for the large glass door entrance to Costco Wholesale.
The store is Sarasota Square’s most unconventional and arguably most popular tenant.
It has been more than a year since the nation’s third-largest retailer took over an anchor space left vacant by Dillard’s, transforming the big-box department store space to a wholesale club with wide aisles traveled by forklifts and with merchandise stacked 20 feet high.
Costco’s opening was one of the most successful in the history of the Issaquah, Wash.-based chain. But whether the retailer known for its discount prices on electronics, liquor, jewelry and enormous wholesale-sized food portions will be salvation for Sarasota Square and other malls is an open question.
“Initially, people in the industry thought Costco would generate traffic and help other retailers in malls, and it does appear to be doing that — only marginally,” said Jeff Green, retail analyst with Phoenix-based Jeff Green Partners. “That’s because so much of what Costco sells is perishable that it limits the ability shoppers have to cross shop.’ ”
All too often shoppers enter Sarasota Square’s southside entrance with one retailer in mind: Costco. They leave with oversized red carts stuffed with food and make the haul back toward the parking lot.
“I shop at Costco and go home,” Sarasota resident Lois Marks said. “I still shop at the mall sometimes, but not as often as Costco. I’m the type of person that I’m either in the mall state of mind or Costco. Can’t mix them.”
But Port Charlotte resident Denise Simmons said she loves the mix.
“I shop both. Usually I browse the mall before I go to Costco,” Simmons said. “I think it’s a perfect fit for the mall. I can get all my shopping done.”
Sam Davidson, the Florida marketing director for Westfield, says that the wholesale club’s debut has had an appreciable effect on Sarasota Square, giving many shoppers another reason to visit.
“The impact from Costco has exceeded our expectations. Visitor traffic continues to climb for the center as a whole, experiencing double digit increases throughout the past year,” Davidson said. “Adding Costco to an impressive tenant mix of national fashion retailers and a top-notch AMC 12 (theater) has provided shoppers more reasons to visit the center more often.”
Jeff Welch, owner of Sarasota Square’s All Sports Custom Framing, says he definitely sees the Costco effect. His store, which opened about the same time, is two doors away from the wholesale club.
“We definitely get a lot of foot traffic when Costco is open,” Welch said. “When it’s closed, it falls off.”
“I see shoppers daily with their Costco carts that come through the mall,” he said.
But more competition is coming for those buyers.
With the $315 million Mall at University Town Center — being built by Taubman Centers and Benderson Development Co. at University Parkway and Interstate 75 — scheduled to open at this time next year, Costco’s presence at Sarasota Square is perhaps more important than ever.
Sarasota County was not the first market where Costco took over a space in a traditional mall.
As more big-box spaces opened during and after the Great Recession — either as chains failed or were absorbed into others — Costco found a new affordable niche.
Target and other brands, like Dick’s Sporting Goods — which will open in Tampa’s Westshore Plaza in a former Saks Fifth Avenue space — also have found cheap rents in high traffic areas at malls, too.
This year, Costco opened a 140,000-square-foot wholesale club on the site of a former Hecht’s department store at Westfield’s Wheaton, Md., mall.
“There are stand-alone Costcos on mall properties, but having a store inside a mall is still pretty rare,” said Scott Christensen, general manager at the Sarasota Square Costco.
In Atlanta, Costco had taken over a former stand-alone department store space at the Cumberland Mall in 2006. While Costco immediately attracted customers, the wholesale club also sucked the dwindling mall traffic to its store and clogged up the mall’s parking lot.
“When that store first opened, it didn’t help the mall much at all. There was no interconnection of the customer base,” said Tom Porter, a retail consultant based in Atlanta. “Costco shoppers aren’t the same type as mall shoppers.”
But over time, the mall’s owner was able to replace ailing tenants with stronger brands, bridge the gap and draw a variety of shoppers from both ends of the spectrum.
“The mall was forced to find a mix of high end and low income tenants and restaurants,” Porter said. “Having Costco brought people to the property who wouldn’t otherwise have shopped there. It gave the mall some recognition.”
In Sarasota County, being attached to a mall has also come with challenges, said Christensen, the local Costco manager.
“Customers have some difficulties finding parking, and because the lot is so huge as it expands around the mall, we have some trouble monitoring it and keeping track of carts,” he said.
“But those are growing pains,” Christensen said. “We’ve learned a lot during our first year here.”