Peter Huskins pays a punter’s visit to the new Costco in Canberra.
It’s 6pm on a cold Canberra Monday evening, one week after Costco opened, and surprisingly the car park is relatively empty.
Plenty of people pushing trolleys within the store, but only 3 registers open, that says it all.
This format is the same as many of us have seen in Melbourne, Sydney and overseas with the normal mix of Food, General Merchandise and outstanding stunt lines – same layout, same merchandising, same POD. You know what you expect to find in a Costco and they deliver.
The interesting element to this Canberra store is not the internal dynamics but what Costco’s arrival will cause in this conservative town of 330,000 people.
Apparently a full line Woolies, Big W and Dick Smith are all planned for an adjoining mini centre in January 2012, supposedly supporting a ‘Costco competitive’ range and pricing structure (apparently they outbid Coles for the privilege of opening there). Both of the majors have implemented competitive strategies in an attempt to counter the Costco effect (larger pack sizes, price reductions etc).
There is already a Jim Murphy liquor super store there so the expectation I would think is that the central car park will draw from a huge catchment – think Goulburn, Wagga and the coastal strip right up to Wollongong, around 200kms/ 2 hours, as well as from the existing neighbourhood and destination centres around Canberra. Costco would be looking at $75-100m pa, Woolies at least $50m and that type of turnover just does not happen. It is about changing current shopping habits away from the local retailers and drawing big country style baskets from a very wide catchment.
The quote “everything in Canberra is only 20 minutes away” certainly puts the above into perspective.
So what will be the long term impact of a combined offer such as this on the current offers servicing Canberra population and the ripple effect into the wider catchment? Think about the WalMart effect on regional US A – possibly, but it certainly has the potential.
Watch this space for further developments. If successful it could come to a town near you!
