By James T. Areddy 

SHANGHAI -- The wild grand opening of Costco Wholesale Corp.'s first store in China on Tuesday demonstrated solid consumer demand for U.S. products, if the price is right.

Costco launched the Shanghai store into one of the most tense and confusing periods in the Sino-U.S. trade battle that threatens commercial ties decades in the making. On Tuesday, though, the high-level political fireworks seemed out of sync with throngs of Chinese shoppers who poured into the American-style store determined to secure grand-opening prices on famous U.S. brands including Pampers diapers, Ocean Spray cranberries and Samsonite luggage.

The crush forced Costco to shut its doors just after 1 p.m., eight hours earlier than scheduled. A phalanx of police and security guards blocked people from entering, and some were still trying to get in as a light rain began falling at dusk.

"Only exit, no entrance!" a bullhorn blared in a looped recording. The local police issued a bulletin admonishing residents to "avoid going" to Costco, along with photos of officers closing an adjacent road. As the sun set, a group of police officers could be heard telling a Costco executive how to manage crowds.

A China-based spokesman for Costco, based in Issaquah, Wash., couldn't immediately provide a tally of shoppers and sales. He said Costco shut the doors following a surge of visitors, in an effort to ensure people inside had a positive experience. The store plans to open as scheduled Wednesday, the spokesman said.

Pushing a shopping cart stacked above and below with grape juice, face wash and a pair of Samsonite suitcases, Wang Xu said he spent more than 4,000 yuan, or about $570, in an excursion that took most of the day.

Mr. Wang, a training company employee, said he knows Costco from the internet and his family has bought Costco products using an informal network Chinese use to import U.S. goods. "Now Shanghai has its own, so I wanted to come and have a look," Mr. Wang said.

Sipping a Pepsi, he waved off questions about the trade war. His wife called the topic "too sensitive."

Costco's roughly 150,000-square foot warehouse is located on Shanghai's western edge, between a fire station and offices of the company that makes iPhones. The store features the "same bulk buy experience as U.S. locations," Costco said in a promotional email in June. The China warehouse is a little larger than Costco's average of around 145,000 square feet. The parking lot, with 1,200 spaces, is the company's largest anywhere.

The Costco email priced a Gold Star membership at 299 yuan, or about $41.75. Several shoppers said Tuesday they had signed up online at a 1/3-off discount, including He Jinfeng, whose purchases included 28 croissants, two Hawaiian pizzas and three packets of hot dogs.

Pondering how a $5.99 box of croissants might taste, the 67-year-old Ms. He said she plans to feed them to the grandchildren.

She had more to say about her two hours stuck in traffic near the store before midday and what she described as a disorganized setup inside. Other shoppers said they encountered elbowing for sale items, long checkout lines and a 20-minute wait for the toilet -- much of it documented on photos and videos circulating online in China.

Global retailers have sometimes been overwhelmed by Chinese crowds during promotional sales. In 2007, a stampede for discounted cooking oil left three people dead and more than 31 injured at a store run by France's Carrefour SA. Starbucks Corp. stations security guards with a rope line at its flagship coffee shop in Shanghai.

Costco's opening, which the company has marketed for months at trade fairs and on WeChat, coincided with a particularly topsy-turvy few days of rhetoric and threats between the U.S. and China over trade.

After the weekend volley, the American Chamber of Commerce in Shanghai on Sunday night expressed support for the administration's goal of rebalancing trade with China. "However, we do not see American companies leaving China," the group said in a statement.

--Zhou Wei contributed to this article.

Write to James T. Areddy at james.areddy@wsj.com

 

(END) Dow Jones Newswires

August 27, 2019 12:57 ET (16:57 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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