Costco Moving Forward with Second Location in Australia

April 16th, 2010 · No Comments

Despite objections from shopping center owners (they claim Costco will be anti-competitive), plans for the Sydney Costco are moving forward and have been approved.  The NSW State Government has approved a new $60 million Costco development in Auburn, in Sydney’s west.  Previously, Patrick Noone, the Australian managing director for Costco, had said that once planning approval was received it would take about one year to open the new Sydney location.  I’ll keep my fingers crossed for all of you Sydney shoppers that it is sooner than that though!

The new $60 million store will be located on Parramatta Road in Auburn.  Planning documents indicate that the store will be 14,000 square meters of shopping space, and have space for 800 vehicles in the car park.  The floor space in the warehouse will be about four times that of an average Woolworth’s or Cole’s (two Australian supermarket chains), however, they will carry only about 1/7th of the number of products: 4,000 for Costco versus 27,000 for the average large supermarket.  Of course, we all know that it is not the quantity of different products that matter, it is all about the savings and quality that you can find at Costco.

“Overall, the analysis indicates that prices at Costco are in the order of 25 per cent lower overall than the price of the same products purchased from competing retailers, and this figure is approximately the same for both household and business card holders,” the report, by Essential Economic, states.

Last August, Costco opened its first Australian store in Melbourne’s Docklands and grew to more than 52,000 members within four months.  Similarly, Costco expects a big response from Sydney with an estimate of 60,000 new members signing up within the first year for the Auburn store.  They also project first year total sales for the Auburn store to be approximately $97.5 million with an average of $155 per visit.

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