Costco Drops Plans for Gourmet Grocery Concept

SEATTLE - Costco Wholesale has dropped plans to build a gourmet grocery store in Bellevue, Wash., as the company deals with rising expenses, the Seattle Times reports.

Costco Fresh was to open this fall, but chief executive Jim Sinegal said the Issaquah-based chain of warehouse clubs has decided to shelve the idea. Costco opened an experimental furniture and home-furnishings store in Kirkland last year and plans to open 27 warehouse clubs this year and 35 more in 2004.

"I think our focus is better placed on those items and not new concepts," Sinegal said. "We've just got more than enough things to concern ourselves with."

Costco will continue experimenting with fresh-food offerings at its warehouse stores, Sinegal said.

The 106,000-square-foot store Costco Fresh store would have been smaller than an average Costco, which is usually about 136,000 square feet. The store was planned to focus on gourmet groceries and include a pharmacy, bakery, olive bar, deli, cafe, garden center and photo and optical departments. Products would be packaged in smaller quantities, and membership would be required.
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