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Costco to fill out the empty space at Brand Depot

By johnboy 21 January 2011 38

Last October we noted that retailing giant Costco was gearing up to move into Canberra.

Today Chief Minister Stanhope is celebrating this vindication of his economic leadership.

“This is good news for Canberra, good news for shoppers and a good sign of the confidence that a major international company such as Costco has in the strength of our economy,” Mr Stanhope said.

“Costco will be a welcome addition to the retail and supermarket choices for the Canberra consumer and provide further competition to the supermarket sector, both as a retail supplier as well as a wholesale provider.”

“This will be only the third Costco site in Australia, following on from Melbourne and Sydney. To have the fourth biggest retailer in the US and one of the top 10 worldwide choose the ACT as one its first sites in Australia shows just how strong our economy is, and how much faith Costco has in its continued good health.”

The retail giant has announced plans to open up an outlet at the Brand Depot site. The size of the store is expected to be about 13,500sq, more than four times the size of an average supermarket of around 3,000sqm.

Patrick Noone, Costco Country Manager of Australia said the company was looking forward to opening up in the national capital.

“We are delighted with the investment in Canberra and we are looking forward to being a supplier to businesses and part of the competitive retail market.”

Mr Stanhope said the Costco store would help the Government achieve the aims of its Supermarket Competition Policy, by increasing the competition and diversity in the full line retail supermarket sector in the ACT.

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Costco to fill out the empty space at Brand Depot
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Angelina 1:24 pm 28 Jun 11

dvaey – Campbells don’t have as big a range as Costco so some companies might be happy to justify a $55 annual fee, which would be at least partly tax deductible, in return for more choice. Although I’ve only ever shopped in store at Campbells, their range might be bigger through online ordering. Fyshwick is probably even further to travel than Majura for some northside people too.

Also, companies that bulk order through these kinds of warehouse stores tend to do so in very large quantities. An annual fee of $55 is unlikely to make a difference to a company spending thousands of dollars a year.

I agree that a $60 annual fee for non-company shoppers might put some people off, I think it all depends whether you’ll make that money back in savings at the store or not. My parents, now shopping for just the two of them would not be interested in paying $60 to go out to Majura for a shop. I on the other hand estimate I will more than cover my investment over a 12 month period and have the space to store any stuff I might pick up there. People have pointed out its not just bulk stuff, but I do find it hard to believe that people would pay to regularly shop out there just for the hell of it. As someone else said, it’s not the kind of store that relies on passing traffic.

People who’ve been going to Campbells and are happy with their range and service are obviously going to stick with them, they wouldn’t switch and pay a fee for no reason.

Primal 12:53 pm 28 Jun 11

dvaey said :

Wouldnt it make sense to wait until the store is open? Otherwise by the time the store opens, your 12 month membership will probably only have 10 or 11 months left. I have to wonder how many business customers they will attract with a $55 joining fee, when Campbells charge nothing.

The Costco website assures suckers like me that the clock doesn’t start ticking on Canberra memberships until opening day. Although presumably that means I can’t go get the card and run down and use it in Melbourne without starting things off.

dvaey 12:30 pm 28 Jun 11

Primal said :

I bought my Costco membership online last night.

No, I’m not sure why…

Wouldnt it make sense to wait until the store is open? Otherwise by the time the store opens, your 12 month membership will probably only have 10 or 11 months left. I have to wonder how many business customers they will attract with a $55 joining fee, when Campbells charge nothing.

GBT 11:48 am 28 Jun 11

I think some people have a misconception that all you can get at Costco are bulk size things or packets. They do also sell sizes that most people would use, and as puggy said, they sell things that other supermarkets don’t sell and often have really good specials.

puggy 10:26 am 28 Jun 11

Primal said :

I bought my Costco membership online last night.

No, I’m not sure why…

Because you just can’t wait for the once a month shop for the mega box of cereal, cookies and electronics at decent prices. I used to love Oreos until I bought a Costco size pack. Too much of a good thing.

You’re also getting excited about the really random cheap stuff they have in the middle section of the warehouse. What will you find this week? From my experience in the US, it went from $5 Calvin Klein t-shirts (knock offs or not, they were good quality, better than Gap) to $500 Natuzzi sofas the next.

There is a spot for Costco in the market. Unike the Supabarn warehouse, you just buy massive packets of things, not the entire case of normal size packets.

Primal 10:10 am 28 Jun 11

I bought my Costco membership online last night.

No, I’m not sure why…

Gungahlin Al 9:50 am 28 Jun 11

qbngeek said :

dpm said :

Re: Costco, everyone needs a tub of Vegemite the size of a 4L paint tin! 🙂

Hell yeah, a 4L tin of Vegemite will sstill only last 3-4 weeks in my house. We go through the bigest jars that Coles have in about a week. Vegemite toast for 4 people every day, Vegemite and cheese sandwiches for lunch each week day for 3 of us plus I use it in my cooking.

Must be in the Army to need that much boot polish.

blowers 9:23 am 28 Jun 11

Mrs Blowers went to Costco in Melbourne the other week using the membership bought here a month ago. She was blown away by the variety and price. We also visited a Tesco in Thailand a few months ago and it had everything you wanted and a lot of known brand items cheaper than local markets.
Yes, its not going to be the place to do a weekly or daily shop. but if a visit every couple of months saves us then its a good thing. Sick of being ripped off by the other US companies Woolies and Coles. And as others have said, great for those on the land. The only downside is the news about the former Brand Depot being filled by Woolworths and Coles?? Costco will laugh at the competition.

qbngeek 9:16 am 28 Jun 11

dpm said :

Re: Costco, everyone needs a tub of Vegemite the size of a 4L paint tin! 🙂

Hell yeah, a 4L tin of Vegemite will sstill only last 3-4 weeks in my house. We go through the bigest jars that Coles have in about a week. Vegemite toast for 4 people every day, Vegemite and cheese sandwiches for lunch each week day for 3 of us plus I use it in my cooking.

dpm 8:16 am 28 Jun 11

Grail said :

I’m amused by the folks crowing about how much money you save when shopping at a bulk retailer……

The part i’ll find interesting is how much Woolies et al change their prices to match. Basically, the Big Two have been screwing us (and their suppliers and farmers moreso!) for years. Then, as soon as the small Aldi makes a bit of a difference, they BOTH start crowing about their ‘Prices are down and staying down’ BS, like they’re doing us a favour! Ha! They went as long as was possible with higher prices before lowering them slightly due to some buyers changing store.
Can’t wait to see what happens with a bit more competition…. Magically they’ll find even more savings for us, out of the goodness of their hearts (I pity the poor farmers in this).

On another note, at least the ‘prices are stying down’ scheme may make some things at the Big Two cheaper for a while, does anyone remember the old Woolies ‘Rollback’ crap? What a joke, things were ‘rolled back’ one week then went back to normal prices! WTF was that about? More like a normal weekly special than a ‘rollback’….

Re: Costco, everyone needs a tub of Vegemite the size of a 4L paint tin! 🙂

Angelina 10:11 pm 27 Jun 11

Grail said :

I’m amused by the folks crowing about how much money you save when shopping at a bulk retailer.

Are you the same folks complaining about feral teenagers, or the lack of job opportunities for unskilled workers?

I think you’ll find that Costco will create quite a lot of job opportunities for both skilled and unskilled workers in the region. I know they’re still advertising plenty of positions in the store that need to be filled when they open it.

A place like Costco wont cause Woolworths and Coles supermarkets to close down, so there’ll be no job losses there. It might encourage the big 2 to stop being such sacks and start providing some better service and products, and maybe better staff entitilements too.

In fact Coles and Woolies will probably create more job losses in their own stores by implementing more of those stupid auto-checkout facilities, increasing their profit, not reducing their prices and at the same time reducing their employment rates, a strategy I’ve no doubt they’ve been cooking up for some time.

I highly doubt something like costco would have any effect on IGA stores at all since the majority of people (specifically the market costco will be aimed at) don’t do their weekly/fortnightly ‘big’ shop at an IGA. They mostly go in for a few items here or there with some chocolate bars and a paddle pop thrown in, and they’ll still do this. So no job losses there.

On the subject of the Supabarn warehouse, yes I feel bad for the staff that may have lost their jobs. But that place was never very good in the beginning so it’s not surprising that it hasn’t gone very well, with or without costco moving in next door. I started shopping there when they opened, their fruit and veg was poor quality, most of it not local (can’t speak for their meat as I don’t buy supermarket meat). Their range of products in general was average for a place billed as a one-stop bulk shop. In my opinion they were ill-equipped to run a store that size effectively. Running a couple of local supermarkets doesn’t mean you can run a massive bulk outlet with a narrow range of stock and crap fresh food.

A bit of variety in the market is a good thing. As someone who lives on property with a young family and buys in bulk, I’m pretty sure I’m one of their target demographics and I’ll be shopping there. At the same time i’ll continue supporting regional producers and companies by shopping at locally for other things and EPIC farmers market on Saturdays, and still getting the odd paddle pop from the local IGA.

Supporting a big company sometimes doesn’t mean people never support the local people, or their staff. And families shouldn’t feel guilty about trying to save money on daily essentials, a service that costco will probably provide.

Grail 3:18 pm 25 Feb 11

I’m amused by the folks crowing about how much money you save when shopping at a bulk retailer.

Are you the same folks complaining about feral teenagers, or the lack of job opportunities for unskilled workers?

Davo111 9:59 am 17 Feb 11

localfella said :

. Was also told by an employee that they are closing and won’t be re-newing their lease. So much for competition, we just let OS companies come in and take over.

i think its amusing how you link a grocery store closing with a bulk purchase warehouse opening on the other side of the city. What about factors like… rent it too high? myer belco was threatened to shut down for the same reason last year.

Erg0 9:45 am 17 Feb 11

localfella said :

I called in to Supabarn on my way home from work to pick up some meat and veges for dinner to find none. Was also told by an employee that they are closing and won’t be re-newing their lease. So much for competition, we just let OS companies come in and take over.

You must have a different defintion of “competition” to most of us.

localfella 8:40 am 17 Feb 11

I called in to Supabarn on my way home from work to pick up some meat and veges for dinner to find none. Was also told by an employee that they are closing and won’t be re-newing their lease. So much for competition, we just let OS companies come in and take over.

Davo111 4:57 pm 11 Feb 11

allyroger said :

Interseting the negativity towards Costco. …. Would you pay $60 to save a few cents on some beans – probably not but to save a few hundred on a TV and without bargaining? I think so.

i dont think its negativity, but more being realistic. Nobody is going to drive out to Brand Depot to do their daily shopping in order to save a few cents on beans. However, yeah i agree, if i was going to buy a tv (or large items), and i saw one in costcos catalogue (assuming they have one), costo and the membership fee would look ALOT more attractive.

astrojax 4:13 pm 11 Feb 11

i love how costco’s country manager is ‘pat no-one’… sage advice; clearly not going to go heavy on store access security then.

allyroger 3:33 pm 11 Feb 11

Interseting the negativity towards Costco. I spend afew years in the USA and love warehouse stores. Not only will it keep the supermarkets honest but the clowns like Harvey Norman too. Good article (from 2004) about Costco.

http://www.usatoday.com/money/industries/retail/2004-09-23-costco_x.htm

Whether they can pull it off in the Australian market with its higher operating costs, I don’t know. If they can keep the markup to 10% then I predict it will be a massive success. An all the comments about 4.8 litre jars etc, yes there is some of that but sometimes they put noraml packs together and sell in say packs of 4, heavily discounted. Would you pay $60 to save a few cents on some beans – probably not but to save a few hundred on a TV and without bargaining? I think so.

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