Into the weird, wonderful and vast world of Costco's Auckland mega store
Friday, 23 September 2022
Coffins, a nine-foot tall talking witch for Halloween, $2399.99 Alexander McQueen handbags, and packs of 48 rolls of toilet paper the size of a child’s cot mattress.
These will all be on sale in the vast 14,800m² Costco megastore in the Auckland suburb of Westgate, which opens on Wednesday next week.
Patrick Noone, Costco’s New Zealand managing director took media on a tour of the global retail giant's store on Friday with its towering shelves almost stocked to capacity.
It’s been a hard go to get it ready, Noone said, as continued disruption to shipping meant items that should have arrived in two to four weeks, took four to six weeks to arrive.
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Noone expects such a rush at opening, that Costco has a special traffic plan prepared, and hired a neighbouring car park to supplement its own 800-space car park.
Costco is a bulk retailer. Households pay $60 for the right to shop with it.
Noone says its speciality is selling in bulk lower margins than traditional retailers, like the supermarkets it hopes to take market share off in New Zealand.
That means bulk toilet paper, and massive packs of everything from organic chia seeds to laundry detergents.
There are huge 18-litre vats of cooking oil.
The packs in the freezer section are huge.
But there were few prices on display as Costco does not want media to tip off the supermarket duopoly of Countdown and Foodstuffs before it opens.
Noone said he expected the duopoly to respond to Costco’s opening.
There were some prices on display, including for some of Costco’s own Kirkland range of food and merchandise.
It covers a bewildering array of products. There are Kirkland general grocery items like food, drinks and detergents, but there are also Kirkland nativity sets, and Kirkland-branded hearing aids.
One is marked at $1999.99, and Noone said that was several thousand dollars cheaper than Kiwis could buy similar devices elsewhere.
But it’s not only the supermarket duopoly of Countdown and Foodstuffs in its sights.
There’s a pharmacy, a hearing aid clinic, a tyre replacement service, and an optician. You can buy a coffin. You can order artificial turf.
Everything is bigger in Costco.
The packs are bigger. The croissants are bigger. The teddy bears are bigger. The Halloween statues are much bigger, and so are the Christmas trees.
Selling bigger stuff was a deliberate business strategy, said Noone, as was making a big feature of certain ready-to-eat food products, like its “world-famous” hotdogs, for which Noone would not reveal a price.
The same goes for its rotisserie chickens, which are a bigger-seller overseas, and which are roasted in enormous ovens open to shoppers’ view.
Similarly, its bakery is a hive of activity open to public view.
There is a strong American cultural feel to Costco’s Auckland store. Halloween is big. Christmas is big. There are jukeboxes for sale. There is American candy for sale in dangerously large packs. Soft drinks will be sold by the slab.
But the store also caters for those with more healthy diets. Instead of having to repeatedly buy small packs of nuts and seeds at their local supermarket, there are vast packs of on sale at Costco.
To cope with the huge packs, and the bulk-sales model, Costco’s tills have very wide aisles, very wide conveyor belts, and there are huge trolleys for shoppers to load up.
The store is so large, it’s a good walk from one end to the other. One of the Costco staff at work getting the store ready for opening did 25,000 steps yesterday.
The store is slightly larger than most of its Australian stores, Noone said.
Another feature that’s different is signage in both English and te reo Māori.
What’s not available is alcohol, as the west Auckland Costco is in an area in which liquor sales are controlled by a trust, and attempts by local campaigners to strip that trust of its liquor licence have so far come to nothing.
Also not available are home deliveries.
Noone said Costco did not yet have the infrastructure to do them yet.
And while he did not rule it out, he said Costco wanted people to come to the store.
Costco’s customers overseas tended to come once every three to four weeks, and to buy in bulk.
Part of the reason for that was Costco’s “treasure-hunting” strategy.
Noone said Costco’s products turned over quickly, and items on sale one day, may not be available the following day.
The run-up to opening day on September 28 has seen Costco hire more 330 staff.
“We pay over the award rate, and the living wage. We want to give people really, really good jobs, good training,” he said.
Other businesses were struggling with a national skills shortage, but Noone said: “If you pay the right wages, and have the right working conditions, you get the right people,” he said.
Noone said Costco had had little problem finding staff as it paid more than competitors.
Globally, Costco bought around US$250 million of New Zealand products each year.
A lot of it was fresh fruit, dairy and meat, but Noone hoped to see an increase in value-added manufactured goods from New Zealand.
New Zealand brands on sale included Canterbury clothing, and high-value Manuka honey and collagen products.
Costco plans to open more stores. It already has a consent for one in Christchurch.