Costco’s been a hit with American shoppers for years. Now that the discount retailer has made its way across the globe, Australians are enjoying the same low prices that shoppers in the US have become so very used to.
The growing popularity of the bulk-shopping retailer means that Costco needs room to expand. And, not just any old storefront will do. If a store’s going to house barrel-sized vats of cereal or mega-packs of meat, it needs space. Lots and lots and lots of space. That means the big box store can’t just move in anywhere. Recent reports say that the bulk-shopping giant could be looking to move into the abandoned Masters stores after
Managing director of Marketing Focus (for the store) Barry Urquhart told news.com.au, “There’s no question about it, Costco has been warmly accepted in Australia.” Even though the chain’s Australian sites are proving profitable, Urquhart noted that Costco can’t stick to its American site plan as it makes a global mark. “Costcos in America are primarily sited on major arterial roads and high-volume freeways.”
While Americans will drive far away from their homes to spend an afternoon shopping at Costco (once a month or so), it seems as though the Australian audience has a different shopping method.
Urquhart said, “Australians don’t travel as far to do their shopping, therefore the word and concept ‘local’ is very important.” This means putting five or six Costco stores in each of the mainland capital cities. That said, it seems as though most Australians enjoy using shopping centres. Obviously, the warehouse style of Costco won’t fit neatly into a tiny centre.
Here’s where Masters comes in.
The failed hardware store chain constructed warehouse-sized shops—that are now left empty. With the Australian stores projected to turn a profit of more than $1.32 billion this year, according to Costco Australia managing director Patrick Noone, it’s no wonder that the retailer needs a few new homes.
Why is Costco looking to take over these abandoned Masters stores and expand its reach into Australia?
Aside from the obvious financial boost, the stats show that shoppers are moving more towards finding values than ever before. You know, as a mum, that you’re always on the lookout for the best price possible. With a few kids at home (or even just one), your household costs are skyrocketing. Why not save some cash when you can? According to Urquhart, Australians, as a whole, are finding price a key factor when making shopping choices. “Two decades ago value shoppers driven by price was about 16 per cent in Australia,” he said. “Now, about 68 per cent of Australians are value shoppers and price is important.”
While Costco won’t let on exactly what its plans are with Masters stores and Patrick Noone, Costco Australia’s Managing Director told Fairfax Media it would grow the business organically.
“We’re hoping to open one [store] in Marsden Park in Sydney next year, in July. And [the northern Melbourne suburb] Epping is probably going to be 2018, I think. That’s the horizon right now. There are a number of other opportunities around the country but those are the two that we have in the works,” he said.
Mr Noone hinted at Masters stores being part of the plan but said nothing was confirmed.
“We’re always interested in new sites but right now it’s pretty confusing so I don’t know how it’s going to work out,” he said.
Even though value shopping is on the rise, Urquhart did note that not all Australians understand the Costco model. Americans have been using the club/membership shopping method for years. But, it’s not a model that everyone else around the world is entirely aware of. This might mean that after Costco educates the public (about its membership model), the company’s growth in Australia could exceed projections.
Well, in any case — as mums, we enjoy saving. So, the more Costcos available for us to shop in, the better!