Metcash rebranding aimed at Costco

BLAIR SPEEDY
December 14, 2012
The Australian

GROCERY wholesaler Metcash has launched a big-box retail chain in competition with US bulk discounter Costco, rebranding its ailing Campbells chain as Value Depot.

The new chain will feature fresh food and a wider range of general merchandise, including televisions, in a clear challenge to Costco which features high-end electronics.

And unlike Costco, which charges a $60 annual membership fee, Value Depot will be free.

However, Metcash Food and Grocery chief operating officer Silvestro Morabito said customers would need to have an Australian Business Number to circumvent trading rules related to the warehouses’ locations outside of designated retail zones.

The chain would match or beat the price of the national chains and would offer strong discounts with bulk purchases, he said.

The rebranding is expected to throw a lifeline to the Campbells business, which announced the closure of 15 outlets last April as a result of its customer base of independent stores losing market share to petrol station stores as well as the major supermarket chains.

Mr Morabito said 15 of the 18 remaining Campbells outlets, which service 170,000 registered customers including the 7-Eleven chain, would be steadily converted to Value Depot branding, while new sites could also be opened.

Speaking after the opening of the first Value Depot in Brisbane’s Eagle Farm yesterday, Metcash chief Andrew Reitzer said the chain “redefines the bulk wholesale warehouse concept in Australia, offering a great range and cheap prices to both consumers and re-sellers”.

“The opening today effectively relaunches the Campbells’ brand in Australia and will re-engage our traditional base of independent retailers and operators who want to buy in bulk at great prices for their own outlets.”

Unlike Campbells, which had a very basic warehouse layout, Value Depot is air-conditioned and features “specialty stores within the store” including confectionery outlet Sweet Spot, hospitality supplies outlet Catering Connection, and baby, car and fresh food sections.

“Value Depot will deliver a total solution for small operators, especially those in hospitality and convenience sectors, who can order almost all the stock and merchandise they need through a one stop shop,” Mr Reitzer said.