When will Costcos money-losing outlets in Japan turn the corner?
We expected to have a difficult time, and we have. We don’t plan to break even for a while. It’s asking too much for a two-store chain to talk about profitability. When we have grown to five, six, or seven stores here, then we can leverage the scale to our advantage [and start to make money]. We can be there in about two more years. Japan is the second-largest retail market in the world. And we’re still growing. Real estate prices have come down since we first started looking four years ago. We’re finding a number of sites that are cheaper than in South Korea. We plan to open up a new store in Tama [outside Tokyo] in September and another between Kobe and Osaka in the spring of next year. Q: What lessons did Costco learn from its earlier ventures in Asia, starting in the late 1990s with three outlets in Taiwan and five stores in South Korea? A: First, we learned: Don’t think of Asia as [one big market]. Think of it as separate markets. [That said,] a lot of our startup experiences in T
