Forum Archive Index - February 2003

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi Allan,

> 
> 
>It appears to me that the reason WHS had it's share price fall off a
>cliff was made public yesterday by a STUFF article.  It reported
>that COSTCO executives had been in NZ over the weekend using a
>helicopter to scout for sites for the possible development of COSTCO
>stores.  
> 
>Since I'm not on the ground there I really can't judge the ability
>of WHS to withstand the fierce competition that COSTCO would bring
>in NZ and Aussie.
> 
>Any thoughts from the troops on the ground??
> 
>

I wouldn't have thought that there would be much blood being sweated 
from Steven Tindall's red T shirt, just because a couple of US 
executives were galumphing around a vacant building site in 
Auckland.  The Warehouse has already humbled KMart (admittedly the 
aussie financed version) in this country, and DEKA (another Aussie 
owned chain) is dead.

I wouldn't want to dismiss COSTCO, but what sort of time scale are we 
talking about to get established in NZ?  Two to three years minimum, 
and even then only in Auckland?  The record of US based chains trying 
to establish here is not a good one.  The fast food chains, 
McDonalds, KFC and Pizza Hut seem to have done OK, although the 
latter had to swallow up Eagle Boys to permanently clip the wings of 
its competition.  But I'm struggling to think of any in general 
merchandising that have made it.

On one of these forums surprise was expressed that 'The Warehouse' 
was trading on a higher P/E ratio that Wal-Mart in the US. It didn't 
surprise me, as earnings-growth wise, the Warehouse has a better 
record ( and by inference a better management team? ) than Wal-Mart.  
Nevertheless perhaps it is time to put COSTCO on the radar screen.  
Is COSTCO a listed company in the US Allan?

SNOOPY



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