Costco to open a NZ store within a year.

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#2040677 19-Jun-2018 18:03

tripper1000:

I don't think it will workout here for them because Kiwi's shoppers are so terrible at budgeting and maths - we just don't seem to be interested in buying in bulk. Kiwi's will buy 2 for $5 because the headline price is cheaper than 6 for $10. It goes hand in hand with the country's poor financial literacy.

It's one of the differences i noticed between the supermarkets here and the USA - there everything is available in bulk because the price per unit is cheaper.

Agreed. We suck at grocery shopping because we don't know what we feel like for dinner. About the only things we regularly buy are the standards milk, butter, etc.

Also, I can not be bothered going and buying 10kg of cereal and having to then pour that in to another container, and then put 100 toilet rolls in the garage and blah blah blah. My parents used to shop like that, we lived out on a farm so every two weeks was the "big shop". Took FOREVER to do the shopping, then it was our (the kids) job to put everything away which took just as long.

Nope. Far easier to just rip past the supermarket and grab what I want at the time.

gzt

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#2040759 19-Jun-2018 20:55

Costco said to be looking for a stadium sized site on the outskirts of Auckland with it's own offramp:

https://www.stuff.co.nz/business/104809877/us-firm-costco-wants-sixhectare-site-own-offramp-on-outskirts-of-auckland

With the membership model I guess they hook you in with a quality big screen TV at a good price then you go there every week for a bulk buy to justify it ; ).

Wellingtondave

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#2040783 19-Jun-2018 22:18

gzt: Costco said to be looking for a stadium sized site on the outskirts of Auckland with it's own offramp:

https://www.stuff.co.nz/business/104809877/us-firm-costco-wants-sixhectare-site-own-offramp-on-outskirts-of-auckland

With the membership model I guess they hook you in with a quality big screen TV at a good price then you go there every week for a bulk buy to justify it ; ).

Good luck to them, how long do you think it will take NZTA or Auckland Transport to approve and or build these connectors? I'd wager 3 years.

Stu

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#2040788 19-Jun-2018 22:35

There is actually available land, correctly zoned (must be, there are already commercial interests making a start), two offramps nearby. The land is in Ramarama/Runciman/Drury, right next to the Southern motorway.

Possibly some out West, but I'm not familiar with the area.

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#2040814 19-Jun-2018 23:58

West the motorway doesnt go that far past westgate and that area is pretty well along with being developed. Past the next offramp up a few km it goes back to being the typical NZ goat track 2 lane road that passes as a state highway. I think south it will be.

Wherever it is, I will probably give it a visit to get some deals if they are worth the drive, once I have the big car working again.

Richard rich.ms

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#2040817 20-Jun-2018 00:33

Stu: There is actually available land, correctly zoned (must be, there are already commercial interests making a start), two offramps nearby. The land is in Ramarama/Runciman/Drury, right next to the Southern motorway.

Possibly some out West, but I'm not familiar with the area.

If it’s way out south there, I don’t think we’ll be travelling from the Shore to shop there.

Sometimes I just sit and think. Other times I just sit.

Stu

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#2040840 20-Jun-2018 07:43

As you'd expect, I guess. The same would be said of those in the South, if they build on the North Shore or far West. There aren't many locations central that would accommodate the building they're suggesting, but I'm sure if we were to look hard enough, they probably do exist.

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vexxxboy

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#2040880 20-Jun-2018 09:25

chevrolux:

tripper1000:

I don't think it will workout here for them because Kiwi's shoppers are so terrible at budgeting and maths - we just don't seem to be interested in buying in bulk. Kiwi's will buy 2 for $5 because the headline price is cheaper than 6 for $10. It goes hand in hand with the country's poor financial literacy.

It's one of the differences i noticed between the supermarkets here and the USA - there everything is available in bulk because the price per unit is cheaper.

Agreed. We suck at grocery shopping because we don't know what we feel like for dinner. About the only things we regularly buy are the standards milk, butter, etc.

Also, I can not be bothered going and buying 10kg of cereal and having to then pour that in to another container, and then put 100 toilet rolls in the garage and blah blah blah. My parents used to shop like that, we lived out on a farm so every two weeks was the "big shop". Took FOREVER to do the shopping, then it was our (the kids) job to put everything away which took just as long.

Nope. Far easier to just rip past the supermarket and grab what I want at the time.

dont forget that a lot of people have a set budget for groceries and they cant afford just to buy say 10 kg of flour, 10 kg of sugar etc even though its cheaper because then they cant buy the small things they need. Buying bulk is for people that can afford to do it .

Common sense is not as common as you think.

tripper1000

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#2040920 20-Jun-2018 10:43

vexxxboy: dont forget that a lot of people have a set budget for groceries and they cant afford just to buy say 10 kg of flour, 10 kg of sugar etc even though its cheaper because then they cant buy the small things they need. Buying bulk is for people that can afford to do it .

I haven't forgotten, that is exactly the type of literacy I was meaning. Focusing on the headline price instead of cost per unit. It only costs "more" when you are first starting up - once you're up and running it costs less. So you don't start with a massive $1,000 bulk shop, you gradually build up your stocks.

TBH the issue is also a cultural thing - the inability to say no to family and the obligation to give away/share any surplus they have. When relatives who don't understand the bulk buying concept see a big stock pile they feel aggrieved that it is not being given to them. It is sad because it means the sensible family members can't get ahead as it financially pulls the family circle down to the level of the most financially reckless members.

It is a common misconception that budgeting is about rigidly sticking to an exact $$ value but it is actually about spending wisely, and staying within a $$ bracket.

MikeAqua

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#2040966 20-Jun-2018 11:40

I agree that building your stores up is big part of budgeting. Allows you to target specials for everyday items.

That said I've been to a CostCo in the US, just for a look. I think we would struggle with storing the quantities they sell some items in.

Mike

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#2040967 20-Jun-2018 11:41

Cool....I can see the wife and I making trips down to buy at Costco. Heck...I can see people organizing van loads to go shopping there.
Back in the olden days where I grew up. Our city did not have a Costco...so we drove 90 min (pretty much everybody did the Costco trip) to the city that had a Costco.

vexxxboy

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#2041026 20-Jun-2018 13:38

tripper1000:

vexxxboy: dont forget that a lot of people have a set budget for groceries and they cant afford just to buy say 10 kg of flour, 10 kg of sugar etc even though its cheaper because then they cant buy the small things they need. Buying bulk is for people that can afford to do it .

I haven't forgotten, that is exactly the type of literacy I was meaning. Focusing on the headline price instead of cost per unit. It only costs "more" when you are first starting up - once you're up and running it costs less. So you don't start with a massive $1,000 bulk shop, you gradually build up your stocks.

TBH the issue is also a cultural thing - the inability to say no to family and the obligation to give away/share any surplus they have. When relatives who don't understand the bulk buying concept see a big stock pile they feel aggrieved that it is not being given to them. It is sad because it means the sensible family members can't get ahead as it financially pulls the family circle down to the level of the most financially reckless members.

It is a common misconception that budgeting is about rigidly sticking to an exact $$ value but it is actually about spending wisely, and staying within a $$ bracket.

again if a family has a strict $150 a week to spend on groceries for a family of 5, and it will be the same every week no money spare , you cant afford to buy in bulk to start up as you say even though it's cheaper over the long term. you would go hungry as you build up supplies.

Common sense is not as common as you think.

MikeAqua

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#2041062 20-Jun-2018 14:10

vexxxboy:

again if a family has a strict $150 a week to spend on groceries for a family of 5, and it will be the same every week no money spare , you cant afford to buy in bulk to start up as you say even though it's cheaper over the long term. you would go hungry as you build up supplies.

You can perhaps, even on that tight budget, buy one or two items per week in bulk if the price is right. Then you don't need to buy those items again for weeks and you have more cash available next week for another bulk item. So now there are two items you don't need to buy for weeks, so you have more cash available for bulk purchases.

Takes planning and discipline though. And if money is tight, there may not be a budget for fuel to visit multiple locations. And if just one thing goes wrong in your wider financial circumstances the plan goes out the window.

I wonder if Costco will ship? I've always wanted to fill a paddling pool with chips.

Mike

Kyanar

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#2041109 20-Jun-2018 14:38

MikeAqua:

I wonder if Costco will ship? I've always wanted to fill a paddling pool with chips.

Costco doesn't ship or offer online shopping at all outside the US. So no.

As it is, I'm stuck driving 30km to my local warehouse (Costco generally expects people will travel up to about 75km to visit one of their stores, based on how large the "catchment area" is for their Australian stores. Only Sydney has three off the top of my head).

Aredwood

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#2041303 20-Jun-2018 19:15

Kyanar:

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.

The above would work perfectly for me. As I mostly get my meals delivered (meat and 3 Veg type meals) with some takeaways as well. Milk is from the local fruit and veg shop (that is cheaper than Countdown). So I only visit the supermarket on average once per month. And typically only buy things like cleaners and toilet paper. Which are no problem to bulk buy.

The Costco model of making profit mostly from membership fees instead of the products they sell. Should also be a big help to larger families.

They also (in the USA at least) have a supplier diversity program. Which helps smaller suppliers get their goods into Costco stores. https://www.costco.com/supplier-diversity.html Which should be a great help for the many small companies in NZ.

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