Costco's move into Queensland, Australia, should not threaten existing retailers and might help them, as just 40% of Costco's range is carried by major supermarkets, less by convenience stores, finds independent report commissioned by state government
April 29, 2013
– US DISCOUNT giant Costco's move into Queensland will not threaten existing small retailers and could even drive more shoppers to their door, an independent report commissioned by the State Government has found.
The independent report by Foresight Partners found just 40 per cent of Costco's limited range would be carried by major supermarkets and even less by smaller convenience stores.
It concluded that the planned Costco at North Lakes, north of Brisbane, would not ``offer the range or depth of merchandise that shoppers would expect to find in even a small supermarket and would not serve as a substitute for neighbourhood convenience centres or higher-order centres''.
Rather than local shoppers dropping in to make small purchases, Costco shoppers were willing to drive long distances to stock up on bulk buys. It found extra traffic could even benefit nearby convenience stores.
The report was one of two by independent consultants relied upon by Deputy Premier Jeff Seeney in his decision, revealed in yesterday's The Courier-Mail, to use his ministerial call-in powers to approve the state's first Costco store at North Lakes.
Mr Seeney said yesterday the extra competition from Costco would put downward pressure on the cost of living.
Existing retailers Westfield and Drakes Supermarkets, owner of a nearby Supa IGA, had attempted to block the development in the courts.
(c) 2013 News Limited