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Published November 10th 2014
Time to get on down to the biggest & cheapest event in town
We've all heard the news that Costco is coming to Adelaide. But what is Costco and why the hype ? I was in Melbourne recently, so I called in to the Costco at Docklands to get answers to these questions and all those others that were buzzing about in my head.
From a corporate perspective, Costco is a giant American retailer that has hit Australian shores with a big box Supermarket concept. There are now warehouses in Victoria, New South Wales, ACT and Queensland with more planned across the rest of Australia. Yep, but I still don't understand all the hype and excitement for a supermarket, a place that all of us attend under sufferance ?
To shop at Costco you need to be a member which attracts an annual membership fee of $60 for individuals or $55 if you are a company or corporate. For this fee, you get to shop plus receive regular communications of specials and promotions etc. This fee concept allows Costco to keep their overhead costs down, and hence pass on greater savings to the customer.
What is so unique about this ?
Costco is unlike anything that has existed in Australia before. There is some similarity with the half-case warehouses of the 1980's in terms of the bulk purchasing concept, and some similarity with the cheap prices on offer at Aldi. Costco markets itself as both cheap prices and bulk buying. They stock all of the traditional favourite products at much cheaper prices and you don't have to sacrifice brand loyalty to get them.
There are a number of reasons why the prices are cheaper, including :
Costco buys in bulk and buys bulk sized items i.e. 36 inch pizzas, 600m of cling wrap
Costco has limited large distribution outlets i.e. one in SA, three in Victoria. This enables them to cut down on store overheads
Costco limit the frills that you would get at a normal supermarket i.e. no express checkout queues, pack your bags yourself.
Costco use forklifts to repack shelves
What do they sell ?
Costco sell almost everything that you would buy in a normal supermarket. Most of the big named brands are stocked as well as a number of US brands. Because Costco buy and sell in bulk, they do not stock unique or low volume items such as a special BBQ sauce with Chipotle, but rather they do stock the normal Heinz BBQ sauces in large squeezable containers.
Everything that Costco does is big from the car park to the shopping trolleys to the warehouse itself. And of course, everything that is for sale comes in the "big" size. Some of the more traditional items like toothpaste are sold in four packs, while nappies are sold in 180-250 item boxes. 10 litres of milk, coupled with a 10kg bar of chocolate is sure to meet your daily dairy intake, while 10kg of rice, 1kg of hummus, and 2kgs of cooking salt will balance out every other dietary need. And for the laundry and bathroom, you can stock them with 10kgs of washing detergent, 1.2 litres of shampoo and 60 roll packs of toilet paper.
What else do they sell ?
But it isn't just grocery items that are available from Costco. Some of the more unexpected items that are on offer include :
Glasses - Costco have their own optometrists and spectacles range
Hearing Aids - An audiologist is in most stores offering hearing tests at greatly reduced prices
Books and toys - Costco also have regular book-signing events
Electronics - Costco stock various printers, laptops, TVs and accessories at heavily discounted prices
Clothes - includes clothes from Tommy Hilfiger, Nike and Fila
Fuel - which as we have seen already in Adelaide, is cheaper than other outlets nearby
Tyres - a tyre repair and replacement service is on offer
Others - Jewellery, golf clubs, plants and flowers just to name a few
And if shopping gives you an appetite, then Costco has a food court that sells some snack foods like pizza, hot dogs, wraps, smoothies and pies for less than $5 for a combination meal.
Is it value for money ?
With customers coming out of the shop with burgeoning trolleys, it was easy to see that they had spent a lot of money, arguably more than any other shopping trip to their normal supermarket. But the fact that they received twice as many goods for that spend does demonstrate value for money.
Costco mightn't suit singles or couples without a family as spoilage may kick in. But for families, or perhaps those who can share some of the bought goods with friends (anyone want 30 of my toilet rolls ?), then Costco makes sense. And if you add the extra bonus of cheaper fuel, then the membership fee is more than recovered within the first few shopping trips.
So Adelaide, are you ready for Costco ? Hook up the trailer up, drop the kids off at the grandparents, and then head on down to Costco to get yourselves some of the cheapest products going around.
But before you do this, take stock of the size of your pantry, fridge, freezer and other storage cabinets. Buying the largest pizza possible is a great money saving idea, but if it doesn't fit in your fridge or oven ..... and 60 rolls of toilet paper does take up a fair amount of space !
The first Costco warehouse for Adelaide is located at 400 Churchill Road, Kilburn, in the former Islington rail workshops. The warehouse opens at 8am on Wednesday 19th November.
I notice that most of this article focusses on the supermarket or food component. Sure, there are some savings there, particularly for large families, small businesses and charitable organisations. But the REAL benefits come with the other items. Hearing aids, for instance, an highly regarded brand pair for about $2000, instead of $10,000! TVs, computers, cameras etc are all cheaper. Petrol - normal usage will probably get you your membership fee back in a year. Many items are locally sourced but they limit their mark ups. Give it a chance!
Much of their stock IS local, esp: the fresh and frozen food sections. It is competition in the market that along with Aldi and Foodland will break the duopoly of Coles/woollies and get a better deal for the producers and the customers.
Im from Canada..a lover of Costco..Ozzies just need to try it before they get stirred up about paying a membership fee..I know they will love it like the rest of the world...go ahead..be open minded..get in ther!! U will love it!! Ur fee is paid off with the savings in No Time! With ..QUALITY BRAND NAME products!! U will SAVE MONEY by shopping ther on toilet paper ALONE!