Costco opens petrol station in Auckland with $2.50 a litre petrol, plans to take on supermarket duopoly
Wednesday, 27 April 2022
Costco is threatening to shake up the fuel and supermarket sector as it opened its first fuel station in New Zealand on Wednesday.
The United States giant opened its massive 27-pump fuel station in Auckland, selling 91 octane petrol for $2.50 a litre, 95 for $2.60 a litre and diesel for $2.10 a litre. under cutting nearby competitors.
The opening of the petrol station, coincided with the first look inside the big box retailer’s $100 million store at Auckland’s Westgate, which is expected to open in late August.
Costco NZ managing director Patrick Noone said he was ready to take on the local supermarket duopoly.
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The petrol station and store can only be used by Costco members, with an annual membership fee of $60 for individuals and $55 for businesses.
The price of fuel was cheaper than nearby Pak ‘n Save fuel on Fred Taylor Dr, which was $2.68 for 91 and $2.51 for diesel, according to fuel price comparison app Gaspy.
But it was not open 24/7 like other competitors. It operated from 6am to 9.30pm Monday to Friday, 6am to 7.30pm on Saturday and 7am to 7pm on Sunday.
West Auckland resident Sam Pritchard was one of the first to fill up at the Costco pump.
He said he had experienced Costco while living in the United States and was excited to have it in his own backyard.
“New Zealand in general is going to be really surprised when they see how Costco operates.
“They are going to enjoy the competition this will bring to the market,” Pritchard said.
The store is expected to offer the chain's full format, ranging from groceries and homewares, to a Costco fuel station, tyre centre, a food court, to optometrist and hearing aid services.
In Australia, Costco prices were 25 to 30 per cent cheaper than at other retailers and the same was expected for New Zealand.
“We expect the New Zealand market to be the biggest launch in the Asia pacific,” Noone said.
The company also has consent for a store in Christchurch, and would look to expand to Wellington in the future.
“The people of New Zealand are ready for competition.”
Membership fees are one of Costco's key sources of revenue, allowing it to run on thin profit margins and pass savings on to customers.
Costco has more than 100 million members across its 828 stores worldwide.
Noone said about 700 people had already signed up for a membership in New Zealand, and expected the figure to reach more than a million as the brand became established.
Memberships opened last month, and people queued for more than 90 minutes outside temporary office to get their hands on one.
About 350 workers would be hired by the time the store opened, and Costco would bring in 30 to 40 staff trainers from Australia.
On opening, the Auckland warehouse would house $24 million worth of goods including diamond rings, coffins and produce baked goods. It had also applied for a pharmacy licence to sell pharmaceutical goods.