Forum Archive Index - February 2003

[Robin Benson <rob@hammerheadmedia.co.uk>]

 From the Independent article ...

> Warehouse chief executive Greg Muir yesterday told The Independent he 
> was not concerned about the prospect of Costco's arrival on the Kiwi 
> retail scene.
>
> "Most of the analysts will tell you that a business like that needs a 
> population of at least one million per store which means just one 
> store in New Zealand at the moment," he said.
>
> "It's just not economic to open a business like that. Even if they 
> opened two stores or used Australia as a distribution centre, the 
> economics don't work for such a low number. You need a whole lot of 
> infrastructure to run a business like that."
>
> Muir says Costco works well in the US because it sells goods in bulk 
> packs &endash; something that had already been tried in New Zealand 
> with limited success. Costco customers, for example, buy soap powder 
> in packs of nine or chicken legs in packs of 36.

That's interesting. Edinburgh and Aberdeen have their own Costco 
stores, Edinburgh having easily a larger population at a tad off 450k, 
and the Scots are well known for seeking out bargains. That said, the 
Costco we shop at occasionally here in Edinburgh has items at 40%-130% 
of the prices you can find in local supermarkets, so Costco does pretty 
well I think, as people seem to still buy this stuff anyway from what I 
have observed.

Also, packs of chicken-legs, etc., are well smaller than Mr Muir would 
have us believe ... maybe 36 is the case in the USA but, I suspect, 
only because that number happens to suit the eating habits of their 
customers :O)

Robin


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