Big-box retail giant Costco is expanding its footprint yet again, with reports the company will announce a new store within the next few weeks to be located near Ringwood, in the eastern suburbs of Melbourne.
And the local managing director says the company is planning a third store for both Melbourne and Sydney, saying both locations can support more stores.
The Ringwood location was rumoured this time last year, when Maroondah City Council mayor Tony Dib made a statement hinting the store would be opening. In February, the company received an injection of cash worth $140 million to help fund its expansion.
Local managing director Patrick Noone told SmartCompany there isn’t anything to be announced yet. “Not for a few weeks,” he said.
The Australian Financial Review suggests the Ringwood site will be announced within the next few weeks, and that the company is also looking at more locations in both Sydney and Brisbane.
The expansion raises questions over how many stores the country can accommodate. There are currently three stores – one each in Melbourne, Sydney and Canberra.
But with such an aggressive plan, and the company now scouting for second and third locations, can the country sustain such rapid expansion with a population of only 22 million?
‘It’s a dynamic business model,” Noone says. “We do one, and if it does well, then we do a second, and then a third or a fourth, and so on.”
“Vancouver has seven buildings for three million people, and they’re doing extremely well.”
Such a plan could have harsh ramifications for other retailers including the major supermarkets, along with Kmart, Target and Big W.
However, Noone says he imagines the local business will eventually end up with more than two locations in Sydney and Melbourne.
“We’re certainly planning on three, hopefully in both cities.”
Earlier this year, Noone also hinted Adelaide was being examined, saying the city “is an interesting area for us”.
Comments