Costco has 15 warehouses in Australia, after entering the supermarket space in 2019. (Source: Costco/Getty)
American bulk-buy giant Costco has become more profitable than Aldi in Australia, financial reports have revealed. That’s despite the membership-only discount chain operating just 15 warehouses across Australia, compared to Aldi’s more than 600 stores.
Costco had sales of $12.6 billion in the 12 months to August, up from $11.4 billion a year earlier. German retailer Aldi, meanwhile, had sales of $13.3 billion in the 12 months to December, up from $12.1 billion a year earlier.
But Costco’s profits edged above Aldi, according to The Sydney Morning Herald, with the American giant bringing in nearly half a billion dollars ($499.2 million) in profits after tax. Aldi notched profits of $403.7 million in 2024.
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The US giant entered the Australian market in 2009 and now employs nearly 13,000 staff across Australia and Taiwan. Memberships cost between $65 and $130, depending on the level.
It’s slated to open two new stores in 2027, one in Melbourne’s Pakenham and the other in Perth’s Alkimos.
Costco Australia country manager Chris Tingman previously told Yahoo Finance the supermarket’s success was down to its “unique offering within the market”.
“We are pleased with Costco’s steady growth within Australia and plan to continue reviewing new opportunities to open more warehouses in the future,” he said.
When choosing new warehouse locations, Tingman said the focus was on finding lots close to members that were big enough to house its range of products, services, fuel stations and car parks.
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Despite being a relatively new player in the Australian supermarket scene, Costco has been successful at diverting customers away from major supermarkets Coles and Woolworths.
During the ACCC’s supermarket inquiry in 2024, Coles CEO Leah Weckert pointed out Costco stores were typically much bigger and could pull about six to eight times the sales of a typical Coles store on a weekly basis.
“You are getting customers that are travelling a long distance to go to that store, and customers are willing to do that because they see the value in going, let’s say, once a month or every couple of weeks to do a stock up on bulk items,” Weckert said.
Weckert said customers were willing to travel a long distance to stock up on bulk items like toilet paper, paper towels, or cereal that would last a long time.
“When a Costco opens, we do see a significant impact, millions of dollars of impact to our network through their openings, because customers are now basically buying a whole heap of products that they would have otherwise been buying from us in smaller quantities each week,” the supermarket boss said.
Coles and Woolworths are currently in the spotlight from the federal government as it cracks down on price gouging.
Treasurer Jim Chalmers announced the new ban on excessive pricing of groceries was now law and would come into effect on July 1, 2026.
Supermarkets could face fines of $10 million per breach, three times the value of the benefit derived, or 10 per cent of the company’s turnover during the preceding 12 months.
The laws only cover very large retailers with revenue of more than $30 billion per year, with Coles and Woolworths the only two supermarkets currently meeting this definition, and not other competitors like Aldi and Aldi.
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