Price Club exits Buffalo market

Price Club exits Buffalo market – Price Co., Buffalo, New York

Arthur Markowitz

Price Club Exits Buffalo Market

SAN DIEGO – The Price Co. for the first time in its history will pull out of a market when it closes its only Price Club in the Buffalo, N.Y., area March 3.

The closing is symbolic of Price Club’s loss of its status as the leading wholesale club, the innovative chain that competitors try to emulate.

But the closing isn’t indicative of any change in the firm’s fortunes. Its current 56 United States stores still remain the leader in individual unit sales, with over $100 million being the average volume. Price Co.’s total sales last year, including volume from its 10 Canadian clubs, were $5.3 billion – second highest in the industry – and are projected to grow over 22% this year to $6.5 billion.

The closing isn’t even a blip on Price Club’s growth as the wholesale club this year will markedly step up its expansion, with a dozen stores in the United States and Canada on the drawing board. In the past, it opened, on average, four to six units a year.

Price opened its 111,000-square-foot club in the Buffalo suburb of Cheektowaga in July 1990, “but unfortunately, sales have been far below what we expected and we do not anticipate profitability at the [store] for some time to come,” said Ted Wallace, chief operating officer for the East Coast.

The company owns the site, which is in a retail-oriented shopping area. The shopping area includes a Pace and an OW Office Warehouse as tenants in the Union Consumer Square strip center about a half mile away, and two major shopping centers nearby: the 1.2 million-square-foot upscale Walden Galleria and the 856,000-square-foot Thruway Mall.

The Cheektowaga closing follows Price’s shutting last fall of two test home office furniture stores. Merchandising ideas gleaned from the test are being used in many Price Clubs as expanded furniture sections are installed.

Trade observers contend that Price’s move out of the Buffalo market and the closing of the two furniture stores indicate a new attitude – a recognition that the wholesale club business is changing and Price, despite its core merchandising strength, doesn’t have all the answers. Execs are now studying what competitors are doing, just as other clubs acknowledged that they closely watched Price in the past in order to challenge the industry founder.

BJ’s Wholesale Club has two units in the Buffalo market, one about six miles away from Price Club and Pace in Hamburg and the other about 18 miles away in Tonawanda.

The Price Club site is also about a mile from the Cheektowaga exit of the New York State Thruway. Real estate sources in the market expect the store will be converted into a warehouse to serve some local or Canadian manufacturer. Buffalo is across the Niagara River from Canada.

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