Costco to Open Fifth Victorian Warehouse in 2027, Expanding Australian Footprint
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Pakenham, Victoria – American retail giant Costco Wholesale corporation has announced plans to open its fifth warehouse in Victoria, Australia, in 2027. This expansion signals continued growth for the membership-based warehouse club within the Australian market, were it is increasingly challenging the dominance of established supermarket chains Coles and woolworths.
Costco’s Australian Expansion
The new Pakenham location will join Costco’s existing network of fifteen warehouses across Australia, established since its initial entry into the country in 2009. Costco Australia country manager Chris Tingman emphasized the company’s ongoing evaluation of opportunities for further expansion, highlighting a commitment to serving its growing membership base.”We attribute our success to our unique offering within the market – our ability to provide access to a wide range of exciting, quality items and services at incredible value resonates with our membership base,” tingman stated.
The company reported approximately $11.37 billion in revenue and $279 million in profit for the fiscal year ending September 2024, encompassing its Australian operations and those in Taiwan. According to The Australian, Costco Australia’s annualized sales have now reached $5 billion.
Did You Know? Costco operates on a membership model, requiring customers to pay an annual fee to access its discounted products and services.
Competitive Landscape in Australia
Costco’s emergence is reshaping Australia’s $120 billion supermarket sector. while Coles and Woolworths currently hold a important market share, Costco’s unique value proposition-bulk purchasing and exclusive member benefits-is attracting a growing customer base. The company’s strategy differs from customary supermarkets, focusing on larger families seeking to stock up on non-perishable goods.
UNSW Professor Nitika Garg explained that Costco’s model isn’t a direct competitor to Coles and Woolworths. “I think that’s one reason why they have been so triumphant in Australia as well, because their model is not in direct competition with Woolies and Coles,” Garg said. The Australian Competition and Consumer Commission (ACCC) has noted that the supermarket sector is characterized by a “near-duopoly” of Coles and Woolworths, controlling roughly 67 percent of the market, with aldi holding approximately 9 percent and Metcash at 7 percent.
| Supermarket Chain | Market Share (Approximate) |
|---|---|
| Coles | 33% |
| Woolworths | 34% |
| Aldi | 9% |
| Metcash | 7% |
| Costco | <1% (estimated) |
Strategic Location and Services
The Pakenham warehouse will offer members access to a wide range of brand-name merchandise,and also warehouse services such as a fuel station. Tingman explained that location selection prioritizes proximity to members and sufficient space for comprehensive product offerings and parking.
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