Costco membership drive exceeds forecasts
Costco Wholesale Managing Director Patrick Noone has reported that the retailer remains unperturbed by the economic conditions as results from their early membership drive surpass expectations.
“I think any time is a good time to open,” he told the Sunshine Coast Daily. “If people are value-conscious and brand-conscious, they will come to us.”
The world’s ninth largest retailer is destined to shake things up in the retail sector in Australia but questions still linger as to whether Australians will embrace the company in a similar manner to Americans. The company sells a much wider range of goods than supermarkets, including offering electronic and bedding goods, and offers goods in bulk – something not seen in Australia outside business-only stores. Their profit is largely derived from an annual membership fee ($60 in Australia for individuals) – again, something Australian consumers are not accustomed to.
“We are a totally different business model (to Coles and Woolworths),” Mr Noone noted. “(However), retail is a constantly evolving, dynamic industry that will continue to evolve whether Costco opens or not.”
The company has said they would prefer most of their goods to be sourced in Australia, presenting an opportunity to Australian suppliers. Although the opportunity can be a challenge for some as Costco often require packaging specifications and sizes not found in other retail environments.
The American-based giant will open their first store in the Docklands precinct of Melbourne in mid-August, with a site for their first Sydney store yet to be announced.