This week has seen Costco open its two latest depots in Australia, taking its total store numbers in the country from three to five.
New stores in both Melbourne and Sydney
With the opening of its new depot in Ringwood, east Melbourne on 20 November and Crossroads, south west Sydney on 21 November, Costco Australia will for the first time operate two stores in the same city. Both new stores will be approximately 14,000 sq m and carry 3,600 product lines across grocery, general merchandise, furniture and clothing categories. With the store at Crossroads also expected to trial Costco's first fuel offering in Australia.
Shoppers recognising the great value and quality proposition
The Members Club Cash & Carry format continues to grow in popularity in Australia. The new depot in Ringwood reportedly generated 8,000 new membership subscriptions (AU$55 annual subscription), adding to the 200,000 members that already exist across Victoria and NSW. Although Costco's offer is obviously orientated around bulk discounts, it also aims to provide the best quality and premium brands in the market place, selling AU$10,000 diamond rings, designer clothing, fine wine and prime cuts of meat each week. There are no boundaries to the type of products the retailer will sell and it aims to compete with every retailer in the marketplace.
One to three new openings per year expected
Having turned a profit within three years of entering the market, Costco has ambitions to quickly expand its store network in Australia. Costco has already secured new sites in Brisbane and Adelaide and believes there is certainly potential for a few more depots in both Melbourne and Sydney. The retailer will aim to expand at a steady pace of one to three openings a year. Each depot aims to serve approximately 1m people, however its depot in Canberra which serves a catchment of just 400k people is performing well, meaning that in the future the retailer may also consider expanding to smaller cities, such as Newcastle and Townsville.