Gainesville, Florida, a city known for its educational institutions and vibrant community, has been labeled a “Costco desert” due to the absence of the popular wholesale retailer. Despite the demand, Costco’s strict criteria for new store locations have left Gainesville and its surrounding areas without this shopping option.
Costco’s Criteria for Store Locations
Costco, a retail giant, has specific requirements for opening new stores. According to a report by WJHL in early 2020, the company looks for cities with at least 250,000 people in the surrounding “trade area.” The Hanford Sentinel explains that this “trade area” refers to the geographical area from which Costco can attract customers. Furthermore, The Independent Florida Alligator notes that Costco tends to favor more affluent areas, with an average income of around $69,592 in Florida cities that host a Costco.
Gainesville’s Demographic and Economic Profile
Gainesville, home to the University of Florida and Santa Fe Community College, has a population of approximately 145,000, with a median income just over $40,000, as per the Census Bureau. This demographic and economic profile falls short of Costco’s typical market requirements. The city’s significant student population and lower median income might not align with the retailer’s target demographics.
The Costco Dilemma in Gainesville
Residents of Gainesville currently face a two-hour drive to the nearest Costco stores in Jacksonville or Orlando. Efforts by Butler Enterprises to bring Costco to Gainesville were reportedly turned down, with Costco indicating that Gainesville does not match their market criteria.
Joel Davis, a clinical professor at UF Warrington College of Business, suggested that the economic makeup of Gainesville, with many student residents, could be a contributing factor to this decision. Social media discussions among residents echo a longing for a Costco in the area, but also acknowledge the challenges given the city’s demographic and economic makeup.
Ocala’s Interest in Costco
The desire for a Costco extends to nearby Ocala, with a population of around 65,000. Some residents, like Brian, who wrote to Ocala News, expressed willingness to travel to Gainesville for a Costco. However, even when combining the populations of Ocala and Gainesville, the total still falls short of Costco’s 250,000 threshold for a “trade area.”
Conclusion
Gainesville’s situation as a “Costco desert” underscores the challenges smaller cities face in attracting certain large retailers. Despite a clear desire for a Costco in the area, the company’s stringent market requirements and the city’s demographic profile make it a less likely candidate for a new store. As residents continue to hope for a Costco, they must grapple with the reality of the retailer’s strategic business decisions.
