![\"\"](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/05\/capi_29d1abace9e5caf1262f787d15d17a90_03e7862bc96c918ddefedd209f573cb4.jpeg\")
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Costco is pushing to expand its Australian warehouse network as families chase cheaper groceries and fuel. Picture: Supplied<\/p>\n
Costco is pushing to blanket Australia with up to 20 new warehouses, as its next major move in Melbourne\u2019s outer southeast faces a crucial $74m planning test.<\/p>\n
The US retail giant is targeting new sites from Hobart to Geelong, Sydney, Perth and Adelaide as cost-of-living pressure drives more shoppers towards cheaper groceries, fuel and supersized trolley loads.<\/p>\n
But its proposed Pakenham warehouse must first clear a planning hurdle on Monday, with Cardinia Shire councillors set to decide whether to approve the 6.2ha project.<\/p>\n
RELATED: Why Portelli keeps $3m cash for \u2018props\u2019<\/a><\/p>\n \u2018We need it\u2019: New giant to rival Coles, Costco<\/a><\/p>\n Costco take-down: Aldi change starts today<\/a><\/p>\n The proposed 130 Greenhills Rd warehouse would include a 14,268sq m store, 836 carparks and a major service station, planting one of the world\u2019s biggest retail names in one of Melbourne\u2019s fastest-growing corridors.<\/p>\n Planning documents say the project would create 250 full-time equivalent jobs once operating and support more than 400 jobs during construction.<\/p>\n An economic assessment lodged with Cardinia Shire says the warehouse would inject about $41m into the local economy each year once open.<\/p>\n Costco\u2019s proposed Pakenham warehouse would include a major service station and 836 carparks. Picture: Supplied<\/p>\n Costco Australia managing director Patrick Noone has previously identified Hobart, Geelong, North Sydney, South Sydney, North Perth and South Adelaide as key markets the company was searching for suitable sites.<\/p>\n The Pakenham proposal is expected to become one of the next major tests of that national rollout.<\/p>\n Costco has 15 Australian stores, compared with Aldi\u2019s more than 600, but has flagged plans for up to 20 new warehouses in five years.<\/p>\n Its expansion comes as Australian households continue to search for relief from higher grocery bills and petrol prices, with Costco\u2019s membership model increasingly viewed as a way for families to stretch their budgets.<\/p>\n QUT consumer behaviour expert Professor Gary Mortimer said Costco was playing the long game as cost-conscious shoppers turned to bulk buying.<\/p>\n Retail expert Gary Mortimer previously said Costco recorded about $500m in after-tax profit, putting it ahead of Aldi\u2019s $499.2m. Its trade area can stretch to a 45-minute drive, meaning a new warehouse can pull shoppers from well beyond its immediate suburb.<\/p>\n For Pakenham, that could make the proposed store a magnet for shoppers across Melbourne\u2019s southeast and Gippsland.<\/p>\n But the proposal has also revived memories of Costco\u2019s failed Officer South plan, which was approved by council before being blocked by the state government in 2023.<\/p>\n That decision centred on the use of industrial land, with the state government arguing the site needed to be protected for future jobs and industrial activity.<\/p>\n Costco\u2019s warehouse model has become a major drawcard for shoppers looking to stretch household budgets. Picture: Supplied Picture: AP Photo\/David Zalubowski<\/p>\n The Pakenham site sits in a similarly sensitive industrial planning zone, meaning the retailer again has to prove a large-format retail warehouse belongs in an area earmarked for employment and industrial growth.<\/p>\n Council officers have backed the new proposal, describing it as an anchor for the Pakenham South Employment Precinct.<\/p>\n If councillors approve the permit, Costco would still need to meet 54 conditions covering drainage, odour, signage, vehicle access and road upgrades.<\/p>\n The company would also need to upgrade the intersection of Koo Wee Rup Rd and Greenhills Rd to the satisfaction of the Department of Transport.<\/p>\n The site is about 500m from the Pakenham Water Recycling Plant, with odour-control measures required.<\/p>\n The proposed Pakenham Costco would become one of the retailer\u2019s next major Victorian sites if approved. Picture: Grace Frost<\/p>\n An assessment commissioned by South East Water recommended upgraded ventilation, air curtains and other measures to reduce odour risk.<\/p>\n Colliers Melbourne East national director Gordon Code previously said Costco had the power to reshape entire commercial precincts because it acted as a destination retailer.<\/p>\n \u201cPeople drive for miles, and the moment they commit to a site the phone runs hot from businesses wanting to be beside them,\u201d Mr Code said.<\/p>\n \u201cCostco looked at multiple sites, but this one wins hands down, direct freeway access and even a natural gas connection, which is critical when you\u2019re baking, roasting and preparing food at Costco\u2019s scale.\u201d<\/p>\n Costco\u2019s Australian expansion plans come as cost-of-living pressure continues to hit grocery and fuel bills. Picture: Liam Kidston<\/p>\n Mr Code said the clearest example was Moorabbin, where Costco anchors Goodman\u2019s Chifley Business Park.<\/p>\n \u201cLook at Moorabbin. Costco anchors Goodman\u2019s Chifley Business Park, and rents in that pocket are about 20 per cent higher than anywhere else. That\u2019s the halo effect,\u201d he said.<\/p>\n \u201cI\u2019d fully expect Pakenham to follow the same playbook.<\/p>\n \u201cCostco\u2019s arrival will turbocharge commercial property values across the precinct.\u201d<\/p>\n The retailer\u2019s Victorian footprint has already shifted significantly this year.<\/p>\n Costco opened its $118m Ardeer warehouse after closing its Docklands store, which was sold to Sonic Healthcare for $100m and is being transformed into a $92m medical hub.<\/p>\n The Ardeer store includes a 16,000sq m warehouse and Australia\u2019s largest Costco fuel station, with 38 pumps.<\/p>\n The retailer also has major Melbourne stores at Ringwood, Epping and Moorabbin.<\/p>\n At Ringwood, Costco became a major anchor after opening in 2013, helping draw shoppers and surrounding retail activity to the area.<\/p>\n The retailer\u2019s proposed Melbourne southeast warehouse would sit in one of the city\u2019s fastest-growing corridors. Picture: Costco via Brimbank City Council<\/p>\n At Docklands, Australia\u2019s first Costco became a key part of the precinct after opening in 2009 before its closure and sale.<\/p>\n The company\u2019s latest move into Pakenham would put it at the edge of Melbourne\u2019s growth frontier, where new housing estates, industrial land and population growth are reshaping the city\u2019s southeast.<\/p>\n It would also place Costco closer to households in areas such as Officer, Clyde, Cranbourne, Berwick, Drouin and Warragul, giving the warehouse a potential catchment well beyond Cardinia.<\/p>\n Mr Code said the Pakenham investment was a \u201cvote of confidence\u201d in Victoria at a time global players were choosing their next footholds.<\/p>\n \u201cVictoria offers a compelling mix, sustained population growth, a deep consumer base and competitive operating costs relative to Sydney,\u201d he said.<\/p>\n \u201cGlobal retailers like Costco aren\u2019t making these decisions lightly.<\/p>\n \u201cThey see Melbourne expanding eastward and outward, and they want to be at the centre of that growth.\u201d<\/p>\n The planning decision will now determine whether Pakenham becomes Costco\u2019s next major Victorian foothold, or whether the bulk-buy giant faces another setback in Melbourne\u2019s southeast.<\/p>\n Councillors are expected to vote on the proposal on Monday.<\/p>\n Sign up to the Herald Sun Weekly Real Estate Update. 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The company typically searches for sites with strong major-road access, growth-area populations of about 400,000 to 500,000 residents, about 14,000sq m of warehouse space and about 800 carparks.<\/p>\n![\"Retail](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/05\/capi_29d1abace9e5caf1262f787d15d17a90_e58dcdfe1d3c21551285976f06a00e3e.jpeg\")
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