The opening of Australia’s first Costco store in Melbourne has been big news over the last few days. It is the first time we have seen this US style of retailing here in Australia on this scale.
While our newsagencies are built on customer service and our local community connections, Costco is unashamedly about price.
For us to understand this new model in the context of what we try and do in our newsagencies we should make a field trip and see Costco for ourselves. This is essential if we claim that our prices are better than others in any major product category.
The arrival of Costco is good for retail in Australia. It forces us to look at ourselves and to focus attention on our points of difference and ensure that consumers value these. They certainly appear to value the Costco price pitch.
People need to understand that Costco is not a traditional retail outlet, so they cannot compare their prices to a normal retail store (they will but they should not). Costco has stated that they are not interested in profits from goods they are more interested in the annual membership fees to drive their profits, which is the opposite to normal retail.
I think it is great that someone has thought out of the box about retail, but people need to be aware of how Walmart has devastated the US retail enviroment and not for the good of customers or workers.
My sister spent a yr in the US and found these stores we not as good as they appear unless you want to buy everything in bulk.
Point of difference is the key as no small business can compete on price alone, also look for blue ocean departments instead of simply copying someone else.
At this stage, without thinking too much about implications down the track, I reckon anything to give the big 2 a run for their money is a good thing. Not that the costco thing will make much of a difference to newsagencies – more of the same, really. I’d love to know how big their mag/paper order was for this week…
I also wonder whether they have a special version like coles and woollies…
I got a call from a person yesterday, asking for last week’s New Idea, for the beauty book free on the cover.
It was news to me, as there was a cookbook last week. Then she said she’d have to go back to the supermarket where she saw it in the first place.
The penny dropped – an opportunity to do some edumacation… So I told her that supermarket and newsagent editions of the same mag can be completely different. She was disappointed that her options were limited in this instance (whether she had her wires crossed, or indeed there was a beauty book on supermarket versions?) in terms of finding the same thing at a different form of retail. It was good to say that unfortunately supermarkets have been allowed by suppliers to do some big damage to the newsagency sector with certain sweeteners and special editions etc.
I can’t see it being a success.
The average Melbournian driving into the docklands (a rabbit warren that’s hard to get into and out of ), to pay a fee to get to buy Vegemite, a Vacumn cleaner, business shirt and washing detergent? All in the same purchase?
I think they’ll make more out of the memberships.
Here are some price points:
http://www.foodweek.com.au/main-features-page.aspx?articleType=ArticleView&articleId=4812
Price points in many areas are rather average unless its a bulk foodstuff purchase.. especially electrical which I know a lot of people were looking forward to seeing how low they could go (which in the end, hasn’t been very far).
Sunday 23 Aug …. 10:00am … stuck in traffic on Footscray RD. Gave up after waiting 30 mins and moving about 100m. Wasn’t the only person/car to do so … in some cases the ONLY reason I moved forward was due to another car giving up.
COSTCO maybe big, they maybe cheaper but the location of their new Melbourne store, sucks big time.
ONE entrance only, totally inadequate parking. What a JOKE.
A complete waste of 2 hours to get there & back … plus the 30 mins of waiting, going nowhere. Waste of petrol and lets not forget the toll charges on top of that.
I’ll give ’em one more try some day in the near future. If it’s just as bad then I’ll be getting my 60 bucks back.
Just paid a visit and am now writing my email to try and get my membership refunded. What a disappointment. Long wait times first in the carpark and then to get in the door. The prices were the same if not more for most items than coles. I usually go to aldi and that puts costco to shame. My advice is make sure you have a day to waste, do your research and be willing to fight to get your membership back at the end of the day. It’s really not worth your money and your sanity.
country that iam from, our supermarkets are as big as a football field and we don’t have to buy in bulk, but as cheap as in bulk otherwise and they sell bikes, lcd tv etc as well. Australia actually is a backward country in term of retails, telcommunication and especially banking… transportation is 19th century catching with india i supposed
I think we’re ahead with transportation.
http://www.youtube.com/watch?v=RjrEQaG5jPM
what i meant is trains for commuters