Costco supersizes Aussie sales

COSTCO has surged past $1 billion in sales for the first time to take hold of around 1.5 per cent of Australia’s $90 billion grocery sector.

Costco supersizes Aussie sales

BULK discount retailer Costco has surged past $1 billion in sales for the first time to take hold of around 1.5 per cent of Australia’s $90 billion grocery sector.

In documents lodged with the corporate regulator last week, the US-based wholesaler reported total revenue hit $1.324 billion, a massive increase from $878.51 million in the previous year.

Costo reported profits of $14.25 million in the 2015 financial year after posting a loss of $8.59 million in 2014. The company said change was primarily due to sales growth from existing and new warehouses.

The retailer, which charges customers an annual membership fee of $60, runs warehouses several times the size of a regular supermarket, selling everything from fresh food to electronics, and recently branched into fuel retailing.

Costco Australia chief executive Patrick Noone told The Australian the Costco model was proving popular among small businesses such as pubs, clubs and bottle shops, and said a number of categories were experiencing strong growth.

“Fresh foods are doing really well, and actually some of the non-food categories as well, like household goods, household appliances are all doing well,” Mr Noone said.

Costco opened its eighth Australian warehouse last month in Moorabbin in Victoria, and is expected to open one more in Sydney and one in the Melbourne suburb of Epping.

The Australian reports an estimated 150,000 Australians have joined Costco as members since opening its first local operation in 2009 in Melbourne’s Docklands.

Market research firm IBISWorld is predicting Costco’s market share to increase over the next five years as new stores open and consumers warm to the membership model and become aware of the diverse range of low-cost products.

“Membership requirements help to ensure customer loyalty and are likely to assist with continued growth,” IBISWorld analyst Brooke Tonkin said in October.

“Costco has the ability to increase competition for discount stores such as Aldi and for wholesalers through the Costco business membership and its highly competitive prices.”

Originally published as Costco supersizes Aussie sales