Costco’s expansive plans for France

Date : 15 February 2013

In an interview with Les Echos, Costco France’s Country Manager, Gary Swindells, has outlined the retailer’s ambition to build a network of 15 outlets in the country over the next five to ten years.

France market entry part of broader European growth strategy

The retailer’s first outlet in France is expected to open in Bussy-Saint Georges, Paris, in 2015, marking Costco’s first expansion into continental Europe. This follows an announcement by the company in 2011 that it would seek to develop a presence in two additional European countries, building on its long-established presence in the UK.  The retailer is also reportedly developing a site in Seville in Spain.

Initial expansion in international markets is often slow

The retailer’s expansion into France is also expected to see sites developed in Marseille, Lyon, Toulouse, Nice and Bordeaux. This reflects Costco’s strategy in international markets of opening a small number of outlets across multiple cities. However, opening 15 outlets over the next ten years would mark a significant acceleration from the retailer’s previous rate of growth elsewhere. In Australia, which Costco entered in 2009, it has only developed three stores to date.

Stronger focus on international growth

The company has indicated that it plans to accelerate its international growth, particularly in Asia where it has established operations in Japan, South Korea and Taiwan. However, it is unlikely to deviate from its historical trend of opening between 20 and 30 new stores each year in total, with the US accounting for over half of these. In many international markets, gaining planning permission for new sites can take several years.