Costco to open a NZ store within a year.

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#2038847 16-Jun-2018 20:44

Costco are a very different business to a normal supermarket and targeting a pretty niche market.

The intense competition between Progressive and Foodstuffs in the NZ market and low margins will mean it will be tough going for them. Costco will rely on their own brand products.

gzt

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#2038853 16-Jun-2018 20:51

and marketing.

Geektastic

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#2038881 16-Jun-2018 21:57

Let's hope they rapidly expand outside Auckland.

Next stop, IKEA!

Kyanar

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#2038910 17-Jun-2018 00:57

Aredwood:

This is the best news that I have heard in ages. As the supermarket duopoly will finally get shaken up. They plan to open on a large site in Auckland with good motorway access.

https://www.nbr.co.nz/article/bulkbuy-giant-costco-slated-set-new-zealand-cs-p-216346

Costco won't put a dent in the supermarkets, they aren't in the same niche. They do, however, have an effect on petrol prices within their immediate vicinity.

If you want competition for the duopoly, you really want Aldi to make an appearance.

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#2038915 17-Jun-2018 06:53

Aredwood:
This is the best news that I have heard in ages. As the supermarket duopoly will finally get shaken up. They plan to open on a large site in Auckland with good motorway access.

https://www.nbr.co.nz/article/bulkbuy-giant-costco-slated-set-new-zealand-cs-p-216346

Progressive foods site in Mt Roskill.

They are moving to the airport, and the site is huge.

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#2038972 17-Jun-2018 09:28

rogercruse:

I did notice one thing on their website that might cause a problem in New Zealand... in the "General Policies" of their "Member Privileges and Conditions" section:

"Shirts and shoes must be worn inside the warehouse at all times"

Does that mean we'll finally see the end of people in their pyjamas doing the shopping?

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#2038996 17-Jun-2018 10:21

there was a store like costco's in Rotorua years ago . They had an american hotdog stand in store and bulk American Products in a huge store , never caught on and closed. The hotdogs were fantastic though.

Common sense is not as common as you think.

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#2038997 17-Jun-2018 10:21

That's tame, ever been to a Walmart ;-)

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#2039007 17-Jun-2018 11:09

Brunzy:

That's tame, ever been to a Walmart ;-)

Yes, I was disappointed. The store stocked no weapons, had a relatively normal number of people of average body mass shopping, and not a single mobility scooter. Prices were not bad though.

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#2039016 17-Jun-2018 11:19

So, is it like a combined Countdown (but not as wide a range of products, many bulk) and a The Warehouse? With bit of Bunnings thrown in?

Might they go big on groceries, and in the short term run a small/medium loss (while they shore up mainstream grocery products) As has been said, they need free access to our grocery products, that would take time with the big two playing hardball.

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#2039018 17-Jun-2018 11:25

I'm just having a nosy at their Australian website and from what I can see The Warehouse Group and Tyre chains would have cause for worry also.

Really hope this ends up in Wellington!

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#2039054 17-Jun-2018 12:49

Anything to break up the duopoly. And don't get me started on price of milk!!

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#2039101 17-Jun-2018 13:28

amiga500:

Anything to break up the duopoly. And don't get me started on price of milk!!

There is nothing stopping anybody from selling milk at whatever price they want. The retail price is largely dictated by the wholesale price which is not controlled by retailers.

NZ has one of the most competitive grocery markets in the world, something The Warehouse found when they tried to expand into the market with Warehouse Extra stores and found they simply couldn't compete on price.

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#2039115 17-Jun-2018 14:13

It’s not in the supermarket sector that NZ most badly needs duopoly or monopoly relief - it’s in building materials.

BTW, how come there’s only one Monopolies watchdog?

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#2039146 17-Jun-2018 16:15

tdgeek:

So, is it like a combined Countdown (but not as wide a range of products, many bulk) and a The Warehouse? With bit of Bunnings thrown in?

Might they go big on groceries, and in the short term run a small/medium loss (while they shore up mainstream grocery products) As has been said, they need free access to our grocery products, that would take time with the big two playing hardball.

No, it's nothing like any of that. A Costco is not a place where you can do your weekly supermarket shop. It's a place where you can get a selection of products at larger product sizes. An example - a 2 pack of 1kg Best Foods Mayonnaise, that you have a roughly 10% chance of consuming before it goes off, a 2 pack of 1kg Vegemite, a 2 pack of electric toothbrushes, a 12 pack of Sirena Tuna, two loaves of Tip Top Bread, 12 freshly baked bagels, a 14 inch pizza, 1kg of wings, 4 new tyres, a new TV, a garden shed, a coffin, 2 litres of iced coffee, 20 litres of Unleaded 98 petrol and 10 m2 of grass. All in the same shop. What you WON'T see, is "weekly shop" sized portion of margarine, mayonnaise, tinned tuna, Vegemite, bread, or anything else. They don't do "mainstream grocery products", and they definitely don't do any kind of loss.

It also will not challenge Bunnings or Mitre 10, because no product in Costco is a permanent line - everything is seasonal, and subject to rotation.

I'll say it again, it does NOT compete with the supermarket duopoly. It will have zero impact on Countdown or Pak 'n Save. It will, however, make waves with Gilmours, Toops and Trents. And as to challenges getting products, that won't be an issue. For a start, Costco Wholesale prefers to do business with local suppliers - the same kinds that appear in Pak 'n Save and Countdown as Select and Pam's brands, and with the major brands that are mostly American owned (Unilever, Mondelez, etc), they'll be more inclined to tell Progressive Enterprises Ltd or Foodstuffs Co-operative Ltd to go jump over Costco Wholesale Corporation, who they have a global relationship with.

If you really want to threaten then duopoly, get in touch with Aldi and try encourage them to set up shop in NZ. They've done wonders for keeping Woolworths and Coles honest.

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