Costco's performance in Australia appears to be going from strength to strength, with revenue for the 53 weeks to 2 September 2012 more than doubling on the previous year and profits turning positive for the first time.
Strong sales and profits
In the retailers FY to 2 September 2012 Costco Australia saw revenues more than double to AU$609.5m and net profits reach AU$9.73m. The rapid increase in revenue is put down to the increasing demand for all categories as ranges develop. Something that was clearly evident in its Sydney warehouse which we visit last March. Costco first opened in Australia four years ago and the turnaround from the AU$38m losses incurred since 2009 will be extremely pleasing for management.
Rapid growth forecast to continue
In what is a unique operating model for the Australian market, Costco has proven extremely popular with consumers and the Sydney depot has one of the highest average basket sizes of any Costco store in the world. With the opening of its latest depot in Canberra in 2012, the retailer now trades three warehouses and has two more due to open in 2013 in Ringwood (Vic) and Crossroads (NSW). With five stores trading by the end of the 2013 FY and another awaiting planning approval in North Lakes (QLD), the members club cash & carry retailer is confident sales will reach AU$1bn in the near future.
Destination appeal proving particularly popular
Managing Director of Costco Australia, Patrick Noone, commented, 'I think there is a lot of opportunity for Costco here in Australia and we are thrilled and very satisfied to see that the business is growing'. He went further to say that like in all grocery operators in Australia, fresh food categories remained popular, as did the bakery and household goods, like toilet paper and detergents. Unlike other retailers in Australia, Costco is the only place shoppers can get food, general merchandise, apparel and BWS under one roof, and all ranges are clearly benefiting from the operators destination appeal.