Costco will open its third West Australian store in Alkimos, with shoppers seen at the first store opening at Perth airport. (Source: Getty)
American bulk buy giant Costco has confirmed it will open its next store in Perth as it continues to expand its footprint across Australia. Since entering our shores in 2009, the membership-based supermarket retailer has grown to 15 stores and raked in an estimated $5 billion in annual sales.
Costco will open its third Western Australian store at the new Alkimos Central Home X Trade Hub in Perth’s northern suburbs. Construction on the first stage of the $33 million retail and services precinct is expected to start in late 2025 and be open by 2027.
Costco Australia country manager Chris Tingman told Yahoo Finance the retailer was pleased with its “steady growth” within Australia and planned to continue reviewing new opportunities to open more warehouses in the future.
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“Costco sees Alkimos as dynamic and fast-growing and we believe we can bring great value to the community,” he said.
“When deciding on new warehouse locations, the focus is to find lots that are close to our members, and are large enough to house our comprehensive range of goods, specialty services, fuel stations and carparks.”
The new store will include the full range of goods and services, including discount fuel and specialty services.
The WA government said the new development was set to generate hundreds of jobs for Western Australians, boost local business and deliver everyday convenience for local residents.
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The new development where Costco will be. (Source: WA Planning)
“With Costco coming soon to the Home X Trade Hub, this is a unique chance for businesses to establish themselves alongside a global retail leader, further enhancing the precinct’s profile and drawing significant customer traffic to the area,” WA Planning and Lands Minister John Carey said.
“The City of Wanneroo’s population has the potential to almost double by 2036 and our government is committed to creating the amenity to support this growth.”
Costco is also due to open its 16th store in Melbourne’s Pakenham in 2027.
Costco’s Australian arm, which includes Taiwan operations, reported sales of $11.366 billion in revenue and a $279 million profit in the year to September 2024, according to financial records.
According to The Australian, Costco had sales of $5.15 billion in the fiscal 2024. That’s compared to Aldi, which operates 602 stores, and had sales of $12.5 billion in fiscal year 2024.
Costco is the only subscription warehouse chain in Australia, selling annual memberships for its stores for between $65 and $130.
Consumer expert Nitika Garg from the University of New South Wales told Yahoo Finance she believes Costco’s success in Australia is partly due to it targeting a different segment of the market.
That’s generally larger families who were looking to bulk buy and often did more infrequent trips. Given its warehouse-style format, Costco tends to buy larger lots of land further out of the city.
“I think that’s one reason why they have been so successful in Australia as well, because their model is not in direct competition with Woolies and Coles,” Garg said.
Costco attracted huge lines of people when it opened its Ardeer warehouse in Melbourne earlier this year. (Source: TikTok/@lifeofemily94, Facebook/Costco Ardeer Community)
At the ACCC’s supermarket inquiry last year, Metcash described Costco’s warehouse model as targeting the “monthly pantry load”, which means shoppers are going there for a large, infrequent main shop on primarily non-perishable goods.
The steady rise of Costco comes amid calls for more competition in the Australian supermarket sector, with Prime Minister Anthony Albanese this month encouraging UAE chain LuLu Hypermarket to set up shop in Australia.
Garg said increasing competition would ultimately lead to better prices for consumers.
“With the opening of the market, one of the things that will happen, or should happen automatically, is price competition,” she said.
In March, the ACCC’s inquiry into the supermarket sector found there was “limited incentive” for Coles and Woolworths to compete on price because of their market dominance.
The watchdog estimates Woolworths has 38 per cent of supermarket grocery sales nationally, while Coles has 29 per cent. Aldi has 9 per cent while Metcash has 7 per cent.
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