Costco 2011 Annual Report Download - page 6

selection. We are not content to simply develop products, and we work hard to ensure that we use
responsible and sustainable practices. We must know the source of every item we buy, provide quality
assurance on each item we carry, and ensure fair treatment for everyone involved in our supply chain.
In fiscal 2011 we spent nearly $1.3 billion for the construction and opening of new warehouses and
depots, as well as renovations to a number of our existing buildings. Costco ended calendar year 2011
with 598 warehouses in operation around the world: 433 in the United States and Puerto Rico, 82 in
Canada, 22 in the United Kingdom, 32 in Mexico, 11 in Japan, seven in Korea, eight in Taiwan and
three in Australia.
We opened 20 net new units in fiscal 2011, compared to 14 in 2010. Five openings were in new
markets, while the rest were infill buildings. In addition, we had two relocations: San Marcos, California,
and Chesterfield, Virginia. Other fiscal 2011 warehouse openings in North America included:
Woodmore Towne Center, Maryland; Fort Oglethorpe and Brookhaven, Georgia; Burnsville,
Minnesota; East Vancouver, Washington; Tucson, Arizona; Lodi, California; Marlboro, New Jersey;
Sanatoga, Pennsylvania; Melrose Park, Bolingbrook and Mettawa, Illinois; and three buildings in
Canada, located in Fredericton, New Brunswick; Rocky View, Alberta; and Courtenay, British
Columbia. And we opened one new Business Center – in San Diego, California. Internationally, we
opened five new buildings: Auburn and Canberra, Australia; Tainan and North Kaohsiung, Taiwan: and
Maebashi Gunma, Japan. Overall, fourteen of our new warehouses had opening day sales in excess of
$600,000, and four of them brought in sums of more than $1 million. The average annualized sales for
warehouses opened this year was $103 million per building – our highest ever.
In the run-up to this year’s holiday season, we also opened six new units in the following communities:
Bucks County, Pennsylvania; Frisco, Texas; Pewaukee, Wisconsin; Augusta, Georgia; Yawata Kyoto
and Zama, Japan. We have been actively reviewing potential sites and securing new properties during
the economic downturn and have many promising locations to be developed over the next few years.
And we are evaluating additional countries to help realize our goal of 1,000 warehouses in operation by
the next 10 to 12 years. The strong showing of our recent international openings reinforces Costco’s
business model as a global success.
Our strategy for expansion includes thorough research and demographic analysis, and strict attention
to return on investment. Surely there is nothing quite like opening a Costco warehouse in a new
market; and our appeal, always so strong in North America, has translated well in the international
marketplace. People the world over just love our great values, quality merchandise and treasure hunt
atmosphere. Our international expansion is an important piece of Costco’s business strategy, and our
global units are booming. Of our 598 locations open at the close of calendar 2011, 26 are in the fast-
growing Asian markets where we operate, and where three of our new warehouses opened this year
posted some of the highest opening-day sales and new member sign-ups in Company history.
Australia is another exciting new market for Costco. We opened our first unit there in 2009 and added
two more in fiscal 2011: Auburn, in the Sydney market, which had one of the Company’s highest
opening day sales; and Canberra, the nation’s capital.
A brief summary of highlights regarding sustainability indicates that by the end of calendar 2011 we will
have in operation rooftop solar photovoltaic systems at 60 of our facilities, which are projected to
generate 55 million kWh of electricity per year. We also continue to expand the use of non-chemical
water treatment systems used in our cooling towers to reduce the amount of chemicals going into
sewer systems. In addition, tons of trash that our warehouses generate each week, much of which was
once discarded into landfills, is now being recycled and renewed into usable products. And we now
have 257 grease recovery systems installed in our warehouses, resulting in the recovery of more than
four million pounds of grease from the waste stream. By coordinating with state and federal incentive
programs, these and other environmental/energy-saving systems help us reduce our carbon footprint
and lower the cost of operating our facilities.
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