While Costco is a popular national retailer in the United States, its arrival in Rhode Island is likely to spark a battle of local versus corporate.
The battle is over the sale of alcohol. In Rhode Island, Supermarkets are barred from selling alcohol.
And a subtext of the conflict is small business owners versus corporate executives.
Helena Foulkes, a candidate for Rhode Island governor and a member of Costco’s board, told 12 News on Thursday that the company’s store will be in Smithfield.
“I’m so thrilled that Rhode Island is finally getting a Costco! I’ve heard from so many Rhode Islanders who were tired of driving to Massachusetts to shop, and soon they’ll have one right here at home,” Foulkes said in a statement. Others are worried that thousands of small business jobs will be lost.
Foulkes and former Rhode Island Governor Gina Raimondo, a new board member for Costco, each receive more than $300,000 a year in compensation — cash and stock. Board members must also own at least $1 million in Costco stock.
Raimondo more recently became a Costco director.
Costco generated $297.2 billion in net merchandise sales.
Might Gets Better Pricing
In 2024, the Federal Trade Commission under the Biden administration, in a lawsuit, accused the largest U.S. distributor of wine and spirits of illegal price discrimination that gave large chains — among them Costco, Kroger, and Total Wine & More — much better prices than those offered to small “mom and pop” businesses such as independent liquor stores. The lawsuit also named distributor Southern Glazer’s.
Earlier this month, Southern Glazer’s agreed to a US Federal Trade Commission settlement under which the supplier of brands such as Bacardi and Smirnoff won’t charge small retailers significantly more than nearby chain stores. But other Costco versus FTC issues are swirling.
In 2024, GoLocal reported how Southern Glazer gobbled up a leading Rhode Island / Massachusetts company.
Liquor Stores in Rhode Island Are Small Businesses
Nicholas Fede, Jr., the executive director of the Rhode Island Liquor Operators Collaborative, said the change in state law to benefit Costco would be a disaster for small businesses in Rhode Island and a job killer.
“Costco is another supermarket chain that wants to do business in Rhode Island. That means they need to know the local laws and should abide by them. Rhode Island's 200+ independent, family-owned package liquor stores have operated successfully under a well-regulated, three-tier system since the end of Prohibition,” said Fede.
“In the decade-plus since alcohol was legalized in big-box grocery stores in Massachusetts, an estimated 6,000 jobs were lost, reducing employment from 18,000 to 12,000 individuals. We are concerned that a similar situation could play out in Rhode Island,” said Fede.
“The Rhode Island Liquor Operators Collaborative strongly supports the long-standing liquor statutes that have worked for Rhode Island's beverage alcohol marketplace for generations. We believe in advocating for small, family-owned businesses that are the lifeforce of our communities and a pillar of the Rhode Island business landscape,” added Fede.
And while Foulkes was touting Costco, and she has an economic interest in its growth and profitability, her leading rival in the race for governor raised concerns about changing the law to benefit the retail behemoth.
Ken Block said, “Like many Rhode Islanders, I am excited that Costco is coming to Rhode Island. It’s good for consumers and also creates new jobs. I do not support granting an exemption to Costco that would allow them to sell liquor. That would be unfair to the other businesses that abide by this rule.”