Costco joins Australian retail fold
The world’s ninth largest retailer has today opened its long-awaited first store in Australia within the Docklands precinct of Melbourne.
The warehouse retailer, which sells everything from branded food products to bakery goods, diamonds and TVs, was flooded with customers upon opening this morning – all hoping to find out what the fuss is about.
“There were people queuing halfway down Docklands this morning,” a Costco spokesperson told ninemsn. “There are thousands of people in the store at the moment.”
Costco is unique in the Australian retail space as they charge individuals, families and businesses an annual membership fee to shop at their outlets. Charging the fee allows margins to be slashed and the sizes of products they have allow for savings by purchasing in bulk.
However, as the membership fee is not seen at retail outlets in Australia, some have questioned their potential for success down under. Strong membership sales, positive press reports and the rush to enter this morning ensure that they have at least got off on the right foot.
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.
Victorian Premier John Brumby and Industry and Trade Minister Martin Pakula welcomed Australia’s first Costco Wholesale warehouse to Melbourne.
Taking a behind the scenes tour of the warehouse on the eve of its grand opening, Mr Brumby said Costco would provide a boost to the local economy.
“Costco’s arrival in Victoria will … deliver great opportunities for local manufacturers and suppliers to supply the store and potentially tap into Costco’s worldwide distribution network,” he suggested.
Mr Pakula said Victoria’s economy, workforce and choice of suppliers had attracted Costco to Melbourne and added that they would provide strong competition to retailers.
“Costco will increase competition in the retail sector and provide choice for Victorian consumers. The new warehouse will give Victorian families additional shopping choice with heavily discounted, bulk packaged goods,” he noted.
“(We have) been a strong advocate for Costco’s move to Melbourne and attracting this investment forms part of our joint Melbourne Retail Strategy 2006:2012 with the City of Melbourne which aims to ensure a diverse Victorian retail sector and attract international flagship stores to Melbourne.”
Costco’s Australian Manager, Patrick Noone, was thrilled the opening day had finally arrived.
“We look forward to contributing to the community in many ways, and to making a positive impact on the local job market,” he said.
Costco’s second store is likely to be opened in the western Sydney suburb of Auburn next year.
Costco is fantastic! I wen there last night to have a look through. The prices are sooooo cheap. They have everything and the quality is better that what we are used to getting through the other (soon to be former) major retail chains here in Australia.
The membership fee is minimal and will pay itself off in no time. This will truly change the face of shopping in Australia and it is about time.
I thought that it was hilarious though that John Brumby tried to claim the accolades for Costco setting up shop here when it was the hard work of John Howard forging the free trade agreement with the US which opened the way for this to happen.
Anyway, this is awesome. Just what the country has needed to smash the monopoly and force everyone else to sharpen their pencils.
I second every word! After 10 years living next to a costco, I really struggle with the high cost and poor quality of groceries in Australia.
Why can’t you all believe it is possible? Low cost, High value, return any time for full refund, no questions asked. You can buy ANY costco product with eyes shut. It will be of best quality. What’s the risk? Worst case, you don’t like it, return it?
Just don’t drive your 5LT ute that’s drinking 1lt/km and complain that the shop is far away and not worth the $60/year. If you have a couple of kids, you’ll be saving that in a couple of buys. But hey… don’t rush… I know what quality looks like. It’s just going to take the rest of you a few years to learn. until then, we’ll be buying anything we can in costco instead of the high margin, low quality local supermarket that attempts to make 20% margin on me (instead of Costco’s 4%).
Go costco!!!!
I think someone needs to fact-check this article. They aren’t the first company to offer a membership-based shopping product to drive down prices through bulk purchase opportunities. Campbells, and incarnations which have been usurped into its empire such as FAL Cash and Carry have been doing this for more years than I care to remember.
There’s nothing wrong with press release journalism, but at least correct the facts they provide when they’re obviously so wrong. Doesn’t help credibility.
Editor’s note: as far as we are aware Campbells only offers their membership to business, which makes Costco unique as they allow families and individuals to buy annual memberships. (N.B. Costco did not mention this in any press release we have seen… we have not seen a release from them since March).
I havent seen anything mentioned about Australian products. I would hate to think our Aussie products would be taking a back seat for other cheaper imported products lining this stores shelves.
to Peter >
There are more aussie products being sold at Costco, than at Safeway and Coles.
Please leave the “bleedin heart” aussie battler mentality at the door!!
God bless AMERICA!!
Costco is absolutely a strong competitor, it is true that everyone love low prices, but travel time and cost would be a problem for outer suburb resident in Melbourne.
Soooo cheap???
I didn’t see it. What made me areally really disappointed was all the positive comments I read about price and quality of products at Costco US.
Quite a few things we bought thinking they were good price turned out to be same price as our local and a few things were actually more expensive. We also made the mistake fruit and vegies. As we are just a couple a lot of it went bad before we had a chance to eat it all. Not Costco’s fault but still, I doubt I’ll get value for my membership fee.
It is also hard to do your homework on prices as products aren’t listed on the net.
As a consumer that buys across all retail avenues, supporting Australian owned/ made and manufactured products is important. Recently Coles has been reported to be the largest retail stockist of Australian products, so if Costco has more lines/ products than them, then they must be doing well. ( I would like to see this proof).
Companies such as Woolworths and Coles are Australian owned chain outlets which means above all else not only do they employ Australians (which Costco would too), they keep the profits here to support local industry.
Think about that one people when you buy. Your dollar is your vote and your vote decides whether or not our industry stays local or gets sold off to foreign investment interests.
Sell out and reap the rewards.
Vote with your head and your feet.. support Australian owned and made, your kids futures depend upon it.
I haven’t been to Coctco, Melbourne but it’s interesting how people raise the issue of Australian products, most American products , these days, have zero trans fat , which a lot of current affair shows have pointed out, is the unheathiest type of fat, and on top of that for example a normal size Snickers bar (presumably)with trans fat in Australia ranges anywhere in price from $1 to $2.50 (AUD), wheras the Snickers in the USA with zero trans fat ranges from 50c to $1.20(USD). I wonder which country Costco Australia sources it’s Snickers bars from and at what cost, I know which one I would prefer.