Costco, the world’s ninth largest retailer, will open their first Australian store on August 17.

The launch of their first warehouse club in the Docklands precinct – on the fringe of Melbourne’s CBD – has been eagerly anticipated and could lead to a new force in the retail market in Australia.

Australian Managing Director Patrick Noone said in an interview today that the plan was for an opening in Sydney’s western suburbs in 2010, with expansion to kick on strongly from then.

“If Melbourne goes well and Sydney goes well we will be opening more soon after,” he told Bloomberg.

Costco customers require a membership to shop there, something not common in Australia. However, the $60 annual fee has not appeared a great deterrent as the company reports membership sales exceeding forecasts. They are restricted from speedy expansion, though, due to the size of their outlets – which are substantially larger than the average Coles or Woolworths store.

Mr Noone added that the US retailer had not set specific store targets, indicating they could stray from the one store for every 500,000 people ratio.

“It all depends on how well we do what we say we are going to in Australia,” he said. “When I was in Canada we started building warehouses to that ratio but when I left our brand name was such that we could build to 200,000 or 300,000 people and have a successful store.”

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