Goyder sees Costco’s entry as an opportunity
Wesfarmers boss Richard Goyder, who yesterday reported his company was “bulletproof at the moment”, is not fearful of the imminent launch of Costco in Australia, instead looking toward the benefits they can draw from the retailer’s entry.
“They’ll make an impact and we’ll learn from that, and we’ll learn what our customers might desire and want,” he said at a business lunch yesterday. “And hopefully we’ll improve our businesses as a consequence.”
Mr Goyder said the success of the ninth largest retailer in the world would largely depend on their ability to access sites of the size they require and Australians embracing the membership model.
“The Costco model, as I understand it, hasn’t been that successful in the UK, so it will depend on how Australians adapt to that model – the membership model – and it depends on how the business performs,” he suggested.
Mr Goyder yesterday again defended the $18 billion purchase of supermarket chain Coles, which has gained some momentum this year as the plans of the new management begin to take shape.
“We are on track in terms of where we believed we would be at this point of the turnaround. I can say this because each month I get a detailed report on how the acquired businesses are performing versus projected profit and the all important cash flow,” he said at an American Chamber of Commerce lunch in Melbourne. “While much has changed in the world since November 2007, the fundamental reasons for acquiring the Group of retail business have not.”
Mr Goyder did not elaborate on the recent performance of Coles, except to indicate that the retailer’s performance would not be far removed from the competition.
They will report their annual sales results on August 20.