Russians Head to Alaska To Shop 'Til They Drop

When Luydmilla Ismailova was on her way home from California to eastern Russia, she made good use of a two-day stopover in Anchorage, Alaska.

In the terminal awaiting the Alaska Airlines flight to Khabarovsk and Petropavlosk, she rhapsodized about the 50 percent markdowns she discovered at the local J.C. Penney store.

"They were the greatest discounts I ever saw," says Ms. Ismailova, director of an English-language center back home in Russia and a frequent business traveler to Alaska and the West Coast.

Russian shoppers have discovered American bargains and have become a part of the local economy in the process. An increasingly familiar sight in Anchorage shops and malls, they are highly visible signs of growing commercial and cultural ties between Alaska and Russia, the country that once owned it.

Anchorage is well-known among Russians for its retail outlets, says Dima Novgorodov, an exchange student from Irkutsk who's studying at Anchorage's Alaska Pacific University.

"The selection and everything is better here, and the prices," he says.

Seeing off a friend taking a flight to Vladivostok, and dressed fashionably in flashy athletic shoes and a baseball-style jacket, he ticks off some favorite local destinations for young Russians: "J.C. Penney, Fred Meyer, Sears, Lamonts...."

But when it comes to Russians shopping in Anchorage, Mr. Novgorodov and his friends are the amateurs. The pros are the so-called "shuttle shoppers," who stop only briefly to visit the city's discount warehouses and outlets - Costco, Sam's Club, Wal-Mart and K mart - and buy in bulk for resale back home.

"We just happen to be the first stopping place," says Russ Howell of the Russian-American Center at the University of Alaska at Anchorage. "They come to Anchorage and shop 'til they drop, go home, and do it again."

Most Russian shuttle shoppers are from Magadan, the nearest big Russian city. Some use the regular Monday flight of Aeroflot, the Russian airline. While the plane goes on to Seattle, these shuttle shoppers spend eight hours or so in Anchorage, then board the return flight home.

One Magadan businessman who makes regular Monday visits, known as "Mr. Costco," was last seen in that store early this month buying a reported $12,000 in toys.

"Mr. Costco" marks a real change from the past, when Russian visitors stocked up on American groceries and toilet paper, items now readily available in Russia, Mr. Howell says. "Now it's clothing, appliances, computer goods, auto parts," he says.

In a way, the commerce revives a piece of Alaska history. The flow of goods from here to Russia was also heavy in the 18th and 19th centuries, when Alaska was a colony of Czarist Russia.

Shuttle shopping is not unique to Anchorage. Russians make regular tours to towns in Turkey and Southeast Asia as well, Howell says: "It's about a $10 billion component of the Russian economy right now."

The exact value of Alaska's "Costco factor," named for a longtime favorite Russian destination, is unknown, says Doug Barry of the Center for International Business at the University of Alaska at Anchorage. The best estimate he has from close-mouthed retailers is "a reasonable amount" - an answer that is "totally vague and ambiguous," he says. But he adds,"It gave me the impression that they had taken note of that segment of their business."

Although the Russian market is important to Alaska merchants, the period of explosive post-cold-war growth may be over. The novelty of traveling to American soil over the Bering Strait has worn off for many Russians, Mr. Barry says. And airline flights to the US West Coast that stop in Anchorage were nearly halved between 1993 and 1995 - the result of new routes to alternative shopping destinations like Seoul and new direct service to other American cities.

Russian shoppers are being enticed by greener pastures in the lower 48 states. Late last year, at the pleading of Alaska Gov. Tony Knowles, Anchorage Mayor Rick Mystrom, and other officials, the US Department of Transportation denied Aeroflot's request for permission to skip Anchorage on some trans-Pacific routes.

When a group of Russian exchange students stopped at the Anchorage airport recently on their way home from Seattle, purchases from upscale department stores were piled near the teenagers' feet. But their only Alaska buys were a few souvenirs, such as a coffee mug, relics of an educational stop in Sitka, Alaska. "We didn't do any shopping in Anchorage," one student said.