Thousands of bargain hunters flocked to the opening day of Costco’s first Australian store in Melbourne yesterday, but the company is already focusing on planning for its first store in Sydney. Office supplies, tyres, plasma televisions and toilet paper were amongst the hot items on the first day, although somewhat surprisingly given Costco’s image as a value retailer, designer handbags appeared to be most popular. According to one report, the two Louis Vuitton handbags on sale (for $869 and $1100) were sold out by 11:30am.
But while Costco Australia managing director Patrick Noone and his team now have the job of building Costco Melbourne’s membership – and convincing shoppers to part with annual membership fees of $60 for individuals and $55 for businesses – they will also have one eye on developing the company’s next store in Sydney.
Plans for the store are well advanced. It will be located in the suburb of Auburn, near Parramatta, on a site currently used by Linfox and BevChain as a transport distribution centre.
According to Costco’s website, the company plans to demolish the existing structures and build a three-storey Costco Warehouse store that would also accommodate the company’s head office.
Given the fact the new outlet will create around 200 permanent jobs and up to 520 jobs during the construction phase, it’s little surprise that the Costco development has been given “major project” status by the NSW State Government.
Costco now must get its plans through the state and local government planning processes, with a “Concept Plan” and a “Project Application” (including detailed architectural plans) expected to be submitted to the NSW Department of Planning in the next few months. Following that, the plans will be put on public display.
The public can already submit feedback on the proposal at the company’s website.
Noone has been upfront about his ambition to have a network of 20 to 30 Costco outlets around Australia, including representation in each state.
A network like that would transform the company’s Australian operations from novelty operator to major retail player.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
