Costco wants a second store in northwest Visalia

Visalia city officials, existing store managers say a new Costco Wholesale is planned for the corner of Shirk Rd. and Riggin Ave.

VISALIA – The only thing more exciting to Visalians than getting a second In-N-Out Burger restaurant is getting a second Costco, a rare feat for a city of less than 200,000 people. Mayor Steve Nelsen said not only is Costco interested in building a second store in northwest Visalia, he thinks “it could happen quickly.” 

Nelsen recently mentioned Visalia’s largest retailer has reportedly tied up land at the northeast corner of Shirk Road and Riggin Avenue, open land currently zoned for industrial use. Nelsen says he does not believe rezoning the corner for retail commercial use should be a big deal and that construction of retail warehouses like Costco is similar to the “tilt-up concrete” technique used to erect industrial buildings faster and more efficiently.

“I don’t see any reason why we could not have this store up and running in a year and half,” Nelsen said.

Nelsen wasn’t the only city official to acknowledge the nation’s fifth largest retailer’s plans for northwest Visalia. Councilmember Liz Wynn said she heard the location “is a done deal” at a recent public meeting. Even administrative staff at the existing Costco in Visalia said the rumor was true when asked about the second location in town but said it could be a few years before the store was operational.

The Visalia Costco remains one of the busiest retailers in town and is said to be near the top in sales in the chain, according to local real estate experts. In 2018 it was estimated the store generated $230 million in sales annually and increasing every year. The current Costco is likely the top contributor to Visalia’s all-important sales tax revenue with an anticipated increase year after year. Visalia sales tax revenue was up 14% in 2020-21. The trend has helped spread the notion that Visalia is experiencing “boom times” – something this news will do little to cool off.

Northside Growth
Like other national retailers in Visalia, growth in the north side of town has brought a number of the popular Mooney retailers like Target to set up shop 6 miles north of the traditional retail strip to the city’s newest commercial thoroughfare, which is filling-in fast. Dinuba Boulevard has already drawn crowd pleasers like In-N-Out and El Pollo Loco and now Tractor Supply is coming too. 

Instead, Costco made a big leap where there are no other retailers to the west, an area booming with industrial buildings. Shirk is where Visialia’s industrial area turns to residential heading east. The property Costco has selected is owned by the farmer/developer Ritchie/Vidovich partnership who have big plans for some 320 acres behind the new Costco. 

The store’s exterior layout will no doubt try to separate the retail activity from the nearby industrial blocks where up to 3 million square feet of warehouses are on the drawing board. This combination could be cause for concern as shoppers and commuters will intersect with workers, big rigs and delivery vans from Amazon and UPS. It will be a signalized intersection but already has rush hour level traffic from Amazon’s fulfillment center.

The jump west might seem odd but it does follow Costco’s pattern of building on the edge to town. The existing Visalia store was built on the southern side of town in 2007 before houses filled in and now houses are popping up to meet the Hanford store at the intersection of Highways 43 and 198. Buying commercial land on the edge of town is cheaper than building in town and Costco knows shoppers will beat a path to their door wherever it is.

The location also has the opportunity to draw from northern Tulare County and southern Fresno County bringing new shoppers to this Costco just 15 minutes from Dinuba, and about 20 minutes from Kingsburg and Reedley. Currently, the closest store for those communities is Clovis.

The only Valley cities with two Costco stores, Fresno and Bakersfield, have a population three to four times larger than Visalia. But a look at pending subdivisions and multi-family projects along with the impressive industrial pipeline must have spread the fever to Costco site-locators that this city’s prospects are good. Now everyone wants to know when Trader Joe’s will get the word?

Job Growth
Costco will likely build a 160,000 square foot store on about 20 acres with an expected cost around $80 to $100 million, according to the box retailer’s industry standards. In 2021, Costco was ranked No. 10 on the Fortune 500 rankings of the largest United States corporations by total revenue. As of March 2022, Costco has 828 warehouses worldwide, including 572 in the United States.

In February 2021, Costco announced that it would be raising the starting rate for its hourly store workers in the United States to $16 per hour. Today it is $20 per hour with reports of mostly happy workers. The average store has 250 to 300 employees. The store will also have a 16-pump gas station and separate car wash.

One of the most famous items sold at Costco is their cooked chicken -a generous 3-pound bird that is fully cooked and seasoned, and they sell for just $5 — cheaper than most supermarkets. Costco loses money by keeping the price so low, but a surge in revenue has coincided with chicken sales, the company’s top executive W. Craig Jelinek said at a virtual shareholder meeting in January. The company serves 101 million chickens every year. A chicken in every pot, so to speak.

Costco operates an international chain of membership warehouses, mainly under the “Costco Wholesale” name, that carry quality, brand-name merchandise at substantially lower prices than are typically found at conventional wholesale or retail sources. The warehouses are designed to help small-to-medium-sized businesses reduce costs in purchasing for resale and for everyday business use. Individuals may also purchase for their personal needs.

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