Supermarket wars: The grocery revolution you might be missing

America’s discount retailer Costco has reported over $1.324 billion in Aussie sales this year, doubling its recent figures. Now Costco has big plans to increase its market share throughout our country, giving established supermarkets a run for their money.

Costco opened its eighth Australian store last month in Victoria, and next year plans to open others in Sydney, Brisbane and Melbourne. An estimated 150,000 Australians have become members of Costco since it first opened on Australian shores in 2009.

Indeed, Costco focuses on selling memberships, which are $60 annually. As a result, Costco can slash its mark-ups, selling everything from diamond rings to coffins at about 20-30% less than mainstream supermarkets and other retailers.

At the moment, Costco warehouses need to be located in suburbs with industrial zoning. However, market researchers have predicted that Costco could support 20 new stores over the next five years, making it more widely accessible to everyday Australians. Costco is also diversifying its business model. It currently has four petrol stations, with plans to open more, and may mimic its USA parent by selling products online.

Its stores are about four times the size of an average supermarket, spanning around 14,000 square metres. Costco sells fresh, frozen and packaged goods often in bulk. As Costco Australia chief executive Patrick Noone observed, “fresh foods are doing really well, and actually some of the non-food categories as well, like household goods (and) household appliances”.

Are you a member of Costco, or do you prefer to shop with supermarkets that you know? Do you think it’s positive that international retailers are challenging Australia’s established ‘grocery giants’?