Costco launch: Aussie manufacturers could benefit

Costco, the world’s ninth largest retailer, this week opened its first store in Australia within the Docklands precinct of Melbourne.

The warehouse retailer, which sells a wide range of goods including branded food products, received a promising consumer response.

A Costco spokesman said there were people queuing halfway down the Docklands and “thousands of people [were] in the store”.

Costco is unique in the Australian retail space as they charge an annual membership fee to shop at their outlets.

Charging the fee allows margins to be slashed and the sizes of products they have allow for savings by purchasing in bulk however fees are unheard of in Australia and success for the retailer remains to be seen.

Costco is also restricted from speedy expansion, though, due to the size of their outlets – which are substantially larger than the average Coles or Woolworths store.

Victorian Premier John Brumby and Industry and Trade Minister Martin Pakula welcomed Australia’s first Costco Wholesale warehouse to Melbourne.

“Costco’s arrival in Victoria will … deliver great opportunities for local manufacturers and suppliers to supply the store and potentially tap into Costco’s worldwide distribution network,” the premier suggested.

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