Warehouse Clubs Lure Customers With Cheap Food

Customers come for the cheap eats and often leave with far more than a full stomach.

April 24, 2012

MCLEAN, VA - With their rock bottom prepared food prices, warehouse stores including Costco, Ikea, and Home Depot are drawing budget-hungry customers away from popular QSRs, USA Today reports.

Costco operates food courts at nearly all of its 592 warehouses around the world, no-frills sections just outside the checkout lines and before the store exit that offer easy access to consumers.

"You don't need to go through a drive-thru," said Michelle Bates, an 18-year-old college student, who was eating pizza at a California Costco. "You just pay at the checkout, and grab and go on the way out."

Costco??s prepared food prices "can??t be beat," USA Today says, with a quarter-pound all-beef hot dog and bottomless fountain drink costing just $1.50, the same price since it debuted at the company in 1985. Generous size pizza slices cost $1.99, a chicken bake sells for 99 cents, and a large Caesar salad with chicken is $3.99.

According to Bob Collins, Costco??s director of operations for the food court and bakery, the company will sell more than 300 million hot dogs, pizzas, and other items at its food courts this year, realizing a "modest profit" from their sales.

Ikea??s restaurants are similarly popular, with its Swedish meatballs and smoked salmon, along with hot dogs and frozen yogurt, eliciting consumer praise.

"You cut the meatball in half and dip it in the lingonberry jam and gravy," said Nancy Flynn, a mom in Berkeley, California. "It's a savory, sweet, creamy combination."

When Flynn??s mother visits from Ikea-less Manhattan, the two invariably make the trek to Flynn??s hometown Ikea for meals.

"When she comes to town and we have errands to run, she'll ask, 'Is it near Ikea? Can we go to Ikea for lunch?' " Flynn said.

For Ikea visitors, the foodservice lure is strategic, as USA Today notes: "As anyone who has ever shopped at an Ikea knows, shoppers are subtly forced along a serpentine route through the store, carefully laid out so you won't miss a thing. That includes the cafeteria."

Russ Lee, a tax and recruiting consultant in Oakland, said his Ikea visits in Emeryville, California frequently include a lunch stop ?" and more. "It's convenient multi-tasking," he said. "I can get light fixtures and eat lunch, too."

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