Costco is a membership-based store. All rights reserved.There was an error submitting the form. When the first Costco stores opened, they were the most profitable in the shopping giant’s empire. Please try again. From one to 10,000: Victoria set to mark gloomy coronavirus milestone Victoria records eight deaths and 627 new coronavirus cases ‘Life saver’: Federal government considers pandemic pay for sick workers Small business employment turning positive as revenues falter Sniffles, sneezing and cough? A new Costco store has opened in Australia and it has some jaw-dropping items.
Costco, which has 12 warehouses across the country, has kept all of its stores in Australia open throughout the COVID-19 pandemic. It is the second largest retailer in the US and the third largest in the world. How to tell if it’s a simple allergy rather than the virus ‘Life saver’: Federal government considers pandemic pay for sick workers How the 5G coronavirus conspiracy theory is making some sick: Study The ‘magic’ number epidemiologists around the country are watchingSubscribe for free to get the latest breaking news and analysis sent to your inbox. From September 2017 to 2018, its Australian revenue grew 14.8 per cent to $1.8 billion. "Retail is all about efficiency. The rise of Costco in Australia is creating a new breed of shopper: The captive consumer.Costco works on a membership basis, where shoppers pay an annual fee of $60 to buy until their trolleys are content.It’s this method, plus the locations of the country’s 11 Dr Callaghan explained: First, by signing up shoppers as members, Costco has a first look at their wallets through direct marketing and insights, plus tailored offerings and specials.Most of the Australian Costco stores are in the capital cities’ suburbs: places like Marsden Park and Cross Roads in Sydney, Ringwood and Moorabbin in Melbourne, and Ipswich, west of Brisbane.While the company requires large parcels on land to build its gargantuan outlets, which will typically be in satellite industrial sites, it’s also a marketing benefit.To get to most Costco stores, Dr Callaghan said, people had to plan to get there.“It’s not a case of nipping around the corner to buy some milk at Costco,” he explained.“People who go there plan to spend one, maybe two hours there – maybe more – and that’s why they have their cafeterias there.“If you can lock people in your store for three hours, it’s going to increase their spending. "We keep the prices low, and we keep bringing in brand name merchandise, and consumer seems to like that," said Costco country manager Patrick Noone.Costco has been particularly successful in fresh food by undercutting the major supermarkets on products like milk, meat and baked good, and there was "a lot of potential there to drive more value" in that area, Mr Noone said.Documents filed with the corporate regulator in late December show Costco's total revenue for the 12 months to September 3 grew by $228 million, or 14 per cent, to $1.8 billion. Costco now has 11 stores across the country, plus a growing online presence. That figure was boosted by $8.6 million due to an accounting change in accounting standards.Mr Noone said revenue growth was driven by opening new stores, in Sydney's Marsden Park and in Epping, Melbourne.Costco plans to open a new store in Brisbane in February, and is about to start construction at another store in Perth, which it hopes to have open before Christmas 2019.It also intends to launch an online offering at some point in 2019, but Mr Noone said there were no firm roll-out plans and that it was too early to release any details, other than that it would be available in every capital city.“The US has a very successful online business, and it’s part of retail now that you have omni-channel rollouts," he said. You wouldn’t find many people who walk out of Costco having spent less than $200.“Make them a captive consumer and they will buy something.”However, Costco’s growing presence Down Under doesn’t spell immediate market dominance and the end to all other retailers, Queensland University of Technology’s Associate Professor Gary Mortimer said.There are still some barriers the company must figure out how to overcome, the leading retail expert told Solidifying its online presence can only be a good thing, Associate Professor Mortimer said, especially given the stores’ somewhat isolated locations.“This move to go online removes that tyranny of distance or barrier of geographical isolation,” Associate Professor Mortimer said.“Suddenly their market becomes everywhere in Australia.”The retailers who will feel the pinch, Associate Professor Mortimer said, will be discount department stores like Target, Kmart and Big W.“Despite (Costco) going online, that will increase their market for them, but there’s still barriers in place … the $60 membership fee, and the psychological barrier of a consuming saying, ‘Why am I going to sign up for another service?’,” he said.Copyright © 2020 The New Daily. Costco is an membership-only warehouse club that provides a wide selection of merchandise, from electronics and clothing to fresh produce and auto care, plus specialty departments and member services including optical, pharmacy, photo center, travel, tire center, and gas station. Costco Australia is looking to expand its operations with three more stores planned for 2016 on the east coast after posting a revenue of $1.3 billion in the last financial year.
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