What Trade War? China's First Costco Draws Crowds of Shoppers -- Update
August 27 2019 - 9:07PM
Dow Jones News
By James T. Areddy
SHANGHAI -- The wild grand opening of Costco Wholesale Corp.'s
first store in China on Tuesday demonstrated solid consumer demand
for U.S. products, if the price is right.
Costco launched the Shanghai store into one of the most tense
and confusing periods in the Sino-U.S. trade battle that threatens
commercial ties decades in the making. On Tuesday, though, the
high-level political fireworks seemed out of sync with throngs of
Chinese shoppers who poured into the American-style store
determined to secure grand-opening prices on famous U.S. brands
including Pampers diapers, Ocean Spray cranberries and Samsonite
luggage.
The crush forced Costco to shut its doors just after 1 p.m.,
eight hours earlier than scheduled. A phalanx of police and
security guards blocked people from entering, and some were still
trying to get in as a light rain began falling at dusk.
"Only exit, no entrance!" a bullhorn blared in a looped
recording. The local police issued a bulletin admonishing residents
to "avoid going" to Costco, along with photos of officers closing
an adjacent road. As the sun set, a group of police officers could
be heard telling a Costco executive how to manage crowds.
"When our doors opened, we encountered a record-breaking volume
of members who wanted to shop with us," Issaquah, Wash.-based
Costco said in a statement that provided no figures but said its
personnel were well-prepared for large crowds. It said safe and
enjoyable shopping is a priority for Costco, and that it is working
with local authorities to control traffic.
Pushing a shopping cart stacked above and below with grape
juice, face wash and a pair of Samsonite suitcases, Wang Xu said he
spent more than 4,000 yuan, or about $570, in an excursion that
took most of the day.
Mr. Wang, a training company employee, said he knows Costco from
the internet and his family has bought Costco products using an
informal network Chinese use to import U.S. goods. "Now Shanghai
has its own, so I wanted to come and have a look," Mr. Wang
said.
Sipping a Pepsi, he waved off questions about the trade war. His
wife called the topic "too sensitive."
Costco's roughly 150,000-square foot warehouse is located on
Shanghai's western edge, between a fire station and offices of the
company that makes iPhones. The store features the "same bulk buy
experience as U.S. locations," Costco said in a promotional email
in June. The China warehouse is a little larger than Costco's
average of around 145,000 square feet. The parking lot, with 1,200
spaces, is the company's largest anywhere.
The Costco email priced a Gold Star membership at 299 yuan, or
about $41.75. Several shoppers said Tuesday they had signed up
online at a 1/3-off discount, including He Jinfeng, whose purchases
included 28 croissants, two Hawaiian pizzas and three packets of
hot dogs.
Pondering how a $5.99 box of croissants might taste, the
67-year-old Ms. He said she plans to feed them to the
grandchildren.
She had more to say about her two hours stuck in traffic near
the store before midday and what she described as a disorganized
setup inside. Other shoppers said they encountered elbowing for
sale items, long checkout lines and a 20-minute wait for the toilet
-- much of it documented on photos and videos circulating online in
China.
Global retailers have sometimes been overwhelmed by Chinese
crowds during promotional sales. In 2007, a stampede for discounted
cooking oil left three people dead and more than 31 injured at a
store run by France's Carrefour SA. Starbucks Corp. stations
security guards with a rope line at its flagship coffee shop in
Shanghai.
Costco's opening, which the company has marketed for months at
trade fairs and on WeChat, coincided with a particularly
topsy-turvy few days of rhetoric and threats between the U.S. and
China over trade.
After the weekend volley, the American Chamber of Commerce in
Shanghai on Sunday night expressed support for the administration's
goal of rebalancing trade with China. "However, we do not see
American companies leaving China," the group said in a
statement.
--Zhou Wei contributed to this article.
Write to James T. Areddy at james.areddy@wsj.com
(END) Dow Jones Newswires
August 27, 2019 20:52 ET (00:52 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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