Guest Post: Costco Opening Day in Melbourne

August 18th, 2009 · 26 Comments

[This guest post is courtesy of BB, an American that has been living in Australia for the last 10 years. She wrote another guest post last week regarding how Australians might respond to the new Costco opening in Melbourne. This post is all about the excitement and impressions of her first trip to the new Costco.]

As has been mentioned on this blog before, the first Australian Costco opened in Melbourne on Monday. I grew up in California with two Costco loving parents, and Costco was like a member of our family. Having lived in Australia for the last 10 years, it is one of the things I’ve missed
most about the US. When I visit family back home, Costco is often the first place we go, and it’s usually the last place we check out just before heading back to the airport. So you can imagine how excited I was when I found out that Costco was coming to my hometown of Melbourne!

My husband, Rob, is Australian but has been to Costco during visits to the US, so he knew what he was in for. He’s a bit of a fan himself, so it wasn’t too hard to convince him to take a day off work to brave opening day with me.

First impressions

Driving up to Costco

Driving up to the new Costco

My first impression upon arriving was how close this Costco is to the Central Business District (CBD) of Melbourne. A lot of people have been complaining about this, because it is “hard to get to” and “too far away” from the suburbs, where most Costco shoppers live. In my opinion, Costco has made a brilliant choice for its first location here. It is immediately adjacent to a freeway exit, and despite Docklands reputation, very easy to get to by car. It is also very close to the city, to which many Melburnians commute for work, which allows for many lunchtime reconnaissance missions by those who might not otherwise be inclined to check it out. But most importantly, it is central. Many large chains seem to locate themselves on the outskirts of the city. Eventually, I am sure Costco will have locations in the suburbs to the North, South, East and West of the CBD. But for now, there is one central Costco and it just makes sense to put it in the middle. In some cities this might not be possible, but Melbourne has recently reclaimed some under-utilized waterfront shipping yards and incorporated the land into the CBD. This is “Docklands”. Therefore, Costco was able to obtain a site large enough for its behemoth warehouse.

Entering Costco....there it is!

Entering Costco....there it is!

As I mentioned in my previous post, my husband and I had debated as to whether opening day would be busy, and whether parking would be a problem in the inner-city location. Costco Docklands has 550 free parking spaces underneath the warehouse itself (the Tyre Centre is also under the building). We arrived at 10 am, and were immediately directed to overflow parking in a nearby multilevel parking structure. So much for free parking! But it was only $5 flat rate and not far at all from the warehouse. But at this point we knew that my doubts about it being busy for opening day were completely unfounded.

Look at that membership queue

Look at that membership queue

We made our way to the large forecourt leading to the entrance to Costco. Because the parking is underground, the entrance is surrounded by landscaped grounds (with long, low concrete planters that are staggered to capture runaway trolleys). We could see that the membership queue was very long, but we already had our cards so we went straight to the entrance.

We were greeted with samples of frozen yoghurt and berry smoothies from the food court, and the familiar sight of Costco. Despite the ultra-modern exterior, underground parking and landscaped forecourt, inside was ALL Costco. Orange shelves, big trolleys, price signs identical to the ones you might see anywhere else, and all the same department signs in red and white. Costco had arrived in Melbourne!

Products (Food)

Lots of chips

Lots of chips

I was especially interested to see what products Costco would bring over from their current range, and what items would be sourced locally. Part of me secretly hoped that every item would be directly imported from the USA … ribs, chimichangas, Pop Tarts and all. But I knew, realistically, that this was not supposed to be an American import store. This was supposed to be Costco, for the Australian market. I suspected that there would be some products, especially Kirkland ones, that came straight from the shelves of American Costco locations, but that many many items would be the same brands I had come to know and love at my local supermarket. Overall, there was a good mix. My first exciting find was Kirkland Organic Salsa and real tortilla chips. I bought the salsa but left the chips behind. The bag was too big and unless I am having 10 people over for a Mexican feast, there is no way I could (or should) be getting through a bag of chips that size!

More food products...

More food products...

For the most part, name brand products (ie, not Kirkland) were local brands. Some notable exceptions were a variety of snack foods (Lay’s, Ruffles), Best Foods mayo, Sunmaid raisins, Skippy peanut butter and Bounce dryer sheets. For the local products, it was loosely divided into two groups: basics and treats.

Australian brand food items

Australian brand food items too

The basics tended to be the “big” brands, the household names like Vegemite, Weet-Bix, Arnott’s biscuits, and locally produced Coke and Pepsi. But, as Costco tends to do, there was also a wide range of treats and gourmet items. These I think are Costco’s best items. The higher-than-average-quality products at similar-to-average-prices, which mean you can get Twinings tea for the price of Lipton somewhere else, or fancy yoghurt for the price of your standard Yoplait somewhere else. Some “upscale” brand names I noticed: Carman’s, Emmaline’s, and Kez’s baked goods, alligatorbrand pastas, and Margaret River dairy items.

Products (Non Food)

Osh Kosh clothing for kids

Osh Kosh clothing for kids

Notably absent from the clothing section was my beloved Carter’s brand. In kid’s clothing, Costco seems to have opted instead for Osh Kosh, which is a well known and highly valued brand name here.

Tommy Hilfiger clothing

Tommy Hilfiger clothing

In adult clothing, notable brands were Champion (and a lot of it!), Hathaway, Lucky Brand, Tommy Hilfiger, Ed Hardy, DKNY, and Polo. There were also all the standard Kirkland items: men’s shirts, jeans, cashmere cardigans, and undies.

Wall o Crocs.  They had a LOT of these!

Wall o' Crocs. They had a LOT of these!

There were also WAY TOO MANY Crocs shoes. They seemed to be filling in space because there wasn’t much else in the way of shoes. One pair of men’s Kirkland walking shoes and some New Balance runners. One pair of girls’ shoes that were sparkly and cute but not really practical and not a brand I recognised. But there were plenty of Crocs.

At this stage in our shopping experience, we started to become really aware of how busy this place really was. It was getting difficult to move around, and the checkout lines were well and truly halfway to the meat department in the rear of the warehouse. It was hard to criss cross the store or really, to move anywhere! We realised we would be at Costco for several more hours (and that the checkout line would take at least an hour in itself), so decided to take turns going to the food court while the other person watched the trolley.

Food Court

Note the Aussie Meat Pie.  I totally called it!

Note the 'Aussie Meat Pie'. I totally called it!

The food court was pretty disappointing. It was fun to see that “Meat Pies” had been added to the menu for the local market (meat pies are standard junk fare here … basically stewed meat in gravy encased in a pastry shell). But the hot dogs were “all pork” so obviously NOT of the usual Costco quality. The pizza was ok but doughy, and they didn’t seem to be cooking them long enough to cook the toppings sufficiently. The cheese pizza was suitably gooey and cheesey and definitely Costco “style”. Just not quite up to par, I’m afraid. I’m ok with that. Next time I’ll get a Very Berry Sundae and a Caesar salad instead.

Check out that view from the food court windows!

Check out that view!

The best thing about the food court was the view. I’ve never been to a Costco with windows at all, so this was pretty cool. And you can see why they did it, the view is just fantastic.

After waiting on a very long line at the food court, we decided we’d better get on the checkout queue, even though we weren’t really finished shopping. Rob stayed on the line for awhile while I tried to dodge around the crowds in order to get a cursory look at the deli, bakery, and produce sections. I picked up a few things here and there to add to our purchases but will really need a few more trips to get a real feel for the variety of products. Rob mentioned to me later than they had veggie trays and things that I had totally missed, so I don’t have too much to report on this. I did see a fantastic variety of artisan breads in the bakery, and picked up some bagels which are pretty hard to come by in Australia!

At one stage, the checkout snaked all the way around the store perimeter.

At one stage, the checkout snaked all the way around the store perimeter.

Meanwhile, back in the checkout queue, patient shoppers were handed free cans of Coke and fresh baked cookies. Costco management is so smart sometimes. Be good to the people waiting in line … if they give up, its a lost sale AND your staff are going to have to put back all those perishables! Which leads me to mention that a lot of people seemed to be “abandoning ship”. There were buffalo wings in the book aisle, oranges in the canned goods, and muffins in the garden section. Some people are so feral! I was glad to see that they had staff picking stuff up and putting it away as quickly as they could. I had to hold on to my trolley a few times, lest it be ferried away by an overzealous employee!

Check Out

By the time we could actually see the checkout area, we’d been waiting for about an hour. There have been reports in the news that some people waited for over 90 minutes. Unfortunately, the staff didn’t seem to have a handle on the logistics here. While one or two lines snaked right around the perimeter of the store, smaller lines kept forming closer to the registers, unbeknownst to those waiting patiently at the rear. What surprised me most was the patience of the shoppers. Australians can be feisty at times, but it seemed like people were generally content to wait their turn and I heard very little complaining. I suppose people were realistic about this being opening day and a bit of an “event”.

At the registers, it seemed there had been a few hiccups with the computer system. Member details were retrieved very slowly after swiping and quite a few items were not scanning and had to be entered manually. Our checker, VJ, an American who’d been an employee since 1989 (according to his name tag) was clearly frustrated. He refused a bottle of water from a supervisor because he knew he would then need a bathroom break. This was a man who was taking one for the team on opening day. What a champion – you’ve gotta love the commitment of Costco employees (although I can’t say the same about the young lady who served my pizza, but you can’t win them all).

The intense drama of the checkouts behind us, Rob and I headed to the overflow carpark, where we had to wait for an elevator because they weren’t designed for Costco-sized trolleys. Two trolleys and 4 people was about the maximum capacity. Remember, this was a normal city parking garage. We walked past the lifts down to the Costco carpark, and they were HUGE! So this shouldn’t be a problem in the future. As we were leaving, we saw some Costco employees struggling to collect trolleys by the dozen from this carpark that was clearly not designed for the task. It looked like hard work, and those men definitely went home with sore arms from pushing trolleys up the hills between levels.

Conclusion

Our purchases

Our cart full of Costco purchases

With our purchases tucked safely in the boot (trunk) of our car, we were off again home. My conclusion? It was definitely Costco. In a way, it was anti-climatic, because it was just Costco. But, on the other hand, WE HAVE COSTCO NOW! And this makes me smile.

Prices

But wait! You might ask, “what about the prices? Isn’t it all about the prices?” For me, not really. For me it’s about the experience, the products, the samples, and the sheer variety of items. But of course, the prices are important too.

I really only paid attention to food prices, because (a) that is the area where it is easiest to make comparisons and (b) it is also the area that all the hype has been about here in Melbourne. We only have 2 major supermarket chains, and some people are under the impression that there is not enough competition here and that Costco’s arrival would mean a price war in the grocery sector. My general impression is this: for brand name products that are available at other Australian supermarkets, Costco’s prices are just about in line with the price for the equivalent item at the majors, when those items are on special. And I mean the GOOD specials. The one where, when you get the ad in your letterbox, you know you better stock up on that item at that price. This impression is based on some initial analysis I’ve done using a few weeks worth of sale ads and a spreadsheet.

For example, Costco sells Weet Bix cereal in 1 kg boxes for $3.29. This same size box is occasionally available at Coles or Woolworths for $2.99. There were a lot of examples of this, especially in the area of “basics” that I talked about before. My gut feel is that Costco felt it MUST have these products on their shelves. And these brands that are household names were not likely to supply Costco – a newcomer to the market that may or may not succeed – at prices lower than what they offer the major supermarkets – who are the bread and butter of their business. I think that better value is possibly to be had in the area of “treats” and “upscale” brands that I discussed earlier. As another Costco blogger has been known to say, Costco’s model is more about improving your lifestyle at an equivalent cost, than it is about providing dirt cheap basics.

But I don’t want to report too much yet. Due to the crowds and time limitations I didn’t get to write down many prices. Also, I only have price data about “advertised specials” at the majors on hand at the moment, not their regular prices. So the jury is still out on price, and I will save that for a later Costco visit and a later post (that is, of course, if Kimberly invites me back!).

I hope you’ve enjoyed hearing about my Australian Costco experience.

Regards, BB

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26 Responses so far ↓

  1. 1 ray // 2009.11.13 at 2:18 am

    carnt wait to visit melbourne costco we shop in scotland edinburgh store and looks like we will be home from home see you jan 2010 our yearly family visit and our summer holiday down under

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