Magazines Archives - 2007 October

Costco reveals plans to enter Australia
Story 5

US-BASED “big-box” format retailer Costco Wholesale has revealed plans to open up to five stores in Australia within the company’s next fiscal year, to take advantage of the country’s booming discount-grocery sector.

Specilising in fresh food and groceries, as well as consumer electronics in warehouse- style stores, Costco currently has over 500 operations worldwide, from the US to the UK and North Asia. By year-end, the group will open up to 35 new stores internationally, before its Australian venture. The group recently revealed that its profit increased by 5% from last year’s.

The timing of the group’s venture will see it in direct competition with existing supermarket giants Coles and Woolworths. The group will extend its customer-loyalty programmes to Australia, with 90-day refunds for electronic goods, and shoppers pay for purchases using their membership cards.

Furthermore, Costco’s decision to set up its stores in high-income suburbs proves a further challenge to the group, as analyst Philip Kimber of Goldman Sachs pointed out: “Given that large sites in Australia are desirable for a number of retail formats such as Harvey Norman and Bunnings, it may be difficult for Costco to secure a large number of these sites.”