FMCG Business joined the Costco team at the opening of the first NZ store, in West Auckland.
The vast 14,800m² Costco megastore in the suburb of Westgate is a bulk retailer and households will need to pay $60 for membership. Costco’s specialty is selling in bulk at lower margins than traditional retailers, like the supermarkets it hopes to take market share off in New Zealand. Home deliveries are not available at this stage.
As expected, everything is simply bigger at Costco, from bulk packs of toilet paper and 4-metre-tall Christmas trees complete with festive lights, to roast chickens (there are eight big rotisserie ovens), designed to tempt busy shoppers. The checkouts are extra wide to accommodate large trolleys and bulk product packs. Selling bigger items is a deliberate business strategy at Costco, as is making a big feature of certain ready-to-eat foods, like its “world-famous” hotdogs.
The Westgate store also includes a bakery, pharmacy and food court. Signage in store is both in English and te reo Māori.
New Zealand brands on sale include Manuka honey, collagen products and everblue shampoo and conditioner. “We are so pleased to partner with Costco to launch brand new, large format hair care duo packs that will only be available at Costco,” says the everblue team.
Costco’s own brand – the Kirkland range of food and merchandise – covers a wide array of products. Shoppers will find Kirkland general grocery items like food, drinks and detergents, but there are also Kirkland-branded hearing aids and many other merchandise items in store.
Kiwi food and grocery suppliers are still on Costco’s radar – the retailer wants more loca businesses to get in touch and offer more products, which could also be sold in 828 other Costco locations globally. It’s about efficiency of scale and rather than making lots of variations, make one sku able to be packed on a pallet, recommends NZ Costco NZ Managing Director Patrick Noone. He says suppliers who want to engage with Costco must think particularly about packaging and size on the pallets – goods are taken directly from trucks and stacked onto the warehouse floor, so appearance and practicality are key.
Costco has consent for another store in Christchurch – so watch this space!