Costco is coming to New Zealand, changing the way we shop

2019-06-11 04:39:46

Discount retailer Costco is set to open its first New Zealand store complete with petrol station in Westgate, Auckland.

The Westgate warehouse will offer the American chain's full format including a Costco fuel station, tyre centre, food court, optometrist, hearing aid services along with groceries and homewares.

The company will start building in the next 12 months, and the store - with a rooftop carpark - will open in 2021.

A pharmacy was also possible in the future, said Costco Australia managing director Patrick Noone.

It will be modelled on Australian stores but with New Zealand brands, he said.

In Australia, Costco was 25-30 per cent cheaper than other retailers and the same was expected for New Zealand.

The Auckland Costco will be a three-level development, with one level of shopping and two levels of car parks containing about 800 car parks

The company was also looking at opening more stores, in Wellington and the South Island, after the Auckland development.

Costco stores typically only stock about 3500 brands.

Noone would not give details about which Kiwi brands Costco will stock.

Chris Wilkinson, managing director of First Retail Group, said the announcement was big news for consumers in New Zealand.

"They are disrupters on an epic scale," Wilkinson said.

"It will be quite significant across a range of categories, not just groceries but right through to stationary, into commercial cleaning supplies. It's a store without boundaries."

Wilkinson said he felt New Zealanders were ready and waiting for these types of stores.

"New Zealanders are a travelled population, pretty experienced with overseas markets and there is an expectation that these kind of offers will be available," he said.

Westgate was one of two options for a big-box store, the other site was Wiri.

Both sites allowed for the scale of a Costco store as well as easy access from the motorway, Wilkinson said.

He said this would change the way Aucklanders shopped.

"This isn't the sort of place you go for the expensive type products, the treats. This is the kind of place you are going to be able to stock up. You will find communities will shop together," he said.

In Australia, Costco opened 10 stores since its arrival in 2009, selling everything from fresh food and groceries to diamonds, and even coffins.

The Australian arm of the wholesaler posted a A$42.1 million (NZ$44.3m) net profit last year, almost double the previous year's profit.

The company is said to be putting pressure on Coles and Woolworths, the two major supermarket competitors as well as the big name petrol stations.

Costco in Australia has consistently sold petrol cheaper than its competitors.

Noone said the bulk buy model presented a whole new way of shopping.

Costco is a membership-based store. In Australia, memberships start at A$60 a year.

Membership fees were one of Costco's key sources of revenue, allowing it to run on  wafer-thin profit margins and pass the savings on to customers.

"Members are also able to buy everything from fresh food and electronics to clothing and cleaning supplies, all in one warehouse," Noone said.

The Westgate Costco warehouse will cover about 14,000 square metres and cost about $90 million to build.

Developers say Costco will employ an estimated 350 new full-time equivalent jobs.

Westgate is one of New Zealand's largest master planned urbanisation projects which has been developed by New Zealand Retail Property Group over the last 20 years.

Retail Property Group general manager Campbell Barbour said attracting Costco was a coup for the development.

A global retailer of this scale and influence added to the ongoing development of Westgate as one of the key retail locations in Auckland, Barbour said.

Construction of the store would start as soon as regulatory consents had been obtained.

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