The state of Costco's expansion in Australia.

April 20, 2017

We get a lot of questions through our social media channels but the one question we get the most is: "When will Costco open a store in my area?" Its the million dollar question isn't it! So if everyone wants a Costco in their area why is it not happening? Doesn't Costco want to make money? Of course they do but the process of opening a new Costco warehouse can take 3 - 4 years from the initial development approval to the actual warehouse doors opening there are some major barriers Costco has to deal with in between those two steps to make it happen. Here in Brisbane I watched the development application from day one to the store opening. Every new Costco warehouse will have these barriers to overcome before they can roll up the roller doors for their first customers. Firstly, local council demands and expectations have to be met which is achievable over time and is normal for any major development on this kind of scale. What really holds back new Costco warehouses from opening are competitor objection submissions. Letter after letter of objections get sent in every time Costco submits a development application to open a new store. Another thing Costco does differently is it almost always buys its own land and builds its own purpose built buildings. This is why Costco didn't take over any of the failed masters hardware properties. 
 

 

So why would Costco's competitors even worry about Costco's presence in Australia? There are three words that perfectly describe why its competitors are worried when Costco tries to open a new warehouse near them: "The Costco effect" You only have to live near a Costco to see the Costco effect in action. If you live near a Costco thats just opened and the petrol near your house is suddenly a whole lot cheaper than it was before theres only one reason for it, "the Costco effect". Costco's competitors are very much used to charging what they like for goods and services while Costco does the opposite. Its no secret that Costco makes its money from its membership fee's and its low overhead warehouse style of operating. In the end what Costco really brings to the table is fair competition. Something the Australian market has desperately needed for a very long time. Its one of the biggest reasons why I am such a passionate fan of how Costco operates.  

So now that you all know why its taking so long for Costco to expand in Australia I need to ask all you crazy Costco addicts one favour. Please be patient with Costco. They really are doing everything they can to get more warehouses open. If you live in a city that already has one Costco like Brisbane, Canberra or Adelaide be happy you have a Costco to go to. If you live in Sydney or Melbourne and you already have 3 or 4 Costco warehouses to choose from then consider yourself even luckier. So put your patience pants on Australia! Good things come to those who wait. 

 

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