Thursday, July 21, 2011

Costco chaos as western Sydney store opens

 http://resources0.news.com.au/images/2011/07/21/1226099/001988-crazy-costco-chaos.jpg
Cars are backed up for blocks as workers in fluorescent suits usher lines of pedestrian shoppers across the road and into a 14,000 square metre warehouse at Auburn.
Welcome to Costco, the US bulky goods retailer where everything is sold in bigger quantities than what you'd normally find in the local supermarket.
Anyone for 2kg of feta cheese? Or a 60-pack of toilet rolls?
A huge 2kg apple pie is just $14.99, but it's the giant deodorants and 220-pack boxes of nappies that are doing a roaring trade at the rainy opening day of Sydney's first Costco.
Even the trollies are super sized, making them harder to dodge as consumers steamroll from aisle to giant aisle.
By 11am (AEST) on Thursday, the 800-capacity car park is full and motorists are being advised to avoid the area.
Inside, dozens queue to apply for a Costco membership, which costs $60 a year and confers the right to shop, while up to 20 shoppers wait in lines at the checkouts.
The Auburn store is the US retailing giant's second Australian store, and comes after the first in Melbourne in 2009. A third store due to open in Canberra on Friday.
According to business information firm IbisWorld, Costco's Australian adventure has been a success so far, with sales revenue for its Melbourne store hitting $166.4 million in its first year.
With an emphasis on cheap goods, Costco is challenging the dominance of Woolworths and Coles supermarkets in a sluggish domestic retail market.
Professor Paul Patterson, an academic at the University of NSW's Australian School of Business, says the big supermarkets will keep a close eye on the chain.
"Somewhere along the line, Coles and Woolies will feel the impact," Prof Patterson told AAP.
For Kelly Chapman from Belmore in Sydney's inner west, Costco offers a unique chance to pick up American food she likes, such as Chippy peanut butter and Quaker oats.
"We travel quite a bit to the States and we've got to know the brands," she says.
But Ms Chapman doesn't believe Costco will oust the need for supermarkets such as Woolies and Coles.
"We'll still need them for our everyday shopping," she says. "Not everyone wants 80 slices of cheese."
It seems like there's enough food in the Auburn store to feed a small country in one sitting.
There are hundreds of 1.5kg spare pork rib packs, layer upon layer of two-dozen egg boxes, gigantic packs of tinned pineapple for those who really, really like tinned pineapple.

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