Deep discount: Costco to sell coffins in Australia

Eli Greenblat
NOVEMBER 13, 2015
THE AUSTRALIAN

US discounter Costco is broadening its offer to include selling coffins for the first time in Australia.
The coffins, which are manufactured in China, will be available from January next year. In the United States Costco coffins retail from around $US1000 to up to $US5000.
Chief executive of Costco Australia Patrick Noone said the warehouse group was also moving into new categories including selling Apple products, with it recently signing a deal to offer iPods, iPads and phones.
Preparing the opening of Costco’s eighth store in Australia in the Melbourne suburb of Moorabbin, Mr Noone told The Australian this morning Costco had maintained a 20 per cent to 30 per cent price advantage compared with the mainstream supermarkets for many years and through successive rounds of price wars.
Mr Noone said he didn’t feel his warehouse membership and bulk-buy model would be threatened by Woolworths slashing its grocery prices or any response from rival Coles.
“We haven’t seen substantial changes in our value proposition, since opening our first store in Melbourne in 2009,” Mr Noone said.
He said Costco was monitoring prices weekly and across a basket of 160 items it had kept its price discount position for six years.
Costco had become a viable and strong force in Australia’s $90 billion grocery sector, stripping customers from Woolworths and Coles as well as German discounter Aldi and the independents, he said.
It is believed more than 150,000 Australians have joined Costco as members, paying an annual fee of $60 to then gain access to its warehouse stores that sell everything from fresh food and groceries, toys, clothing, electronics, diamond rings, sheds and alcohol.
The new store in Moorabbin, the third in Victoria, is also the first Costco in the state to also sell petrol.
Costco will open its ninth store, in Sydney, soon with a 10th expected to be in Epping, Melbourne.
“I have not seen a price war impact our business yet, and out cost of doing business is fundamentally different to their cost of doing business. You know, concrete floor, steel frame ceiling, our costs are a lot lower so we are very competitive and will remain so,” Mr Noone said.
Recent accounts for the local Costco testifies to its growing popularity in Australia with its seven stores last year pulling in sales of nearly $1 billion to give it an estimated 1.2 per cent share of the supermarket industry.