US discount retailer Costco Wholesale has said that global financial turmoil and an economic slowdown in Australia have not slowed its expansion plans, according to reports.
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The company said it is building a “large-format” store in Melbourne, Australia’s second-biggest city, and is “actively looking” for additional sites.
“We still plan to have one site in Melbourne and one in Sydney, and we’re still going full-speed to achieve that,” country manager Patrick Noone told Reuters.
Despite the fact that consumer demand in Australia has slumped this year, Noone said the group has a “robust business model” and does well in a down market and an up market because of it being a discount brand name.
He said Costco’s comparable store sales around the world have been quite strong compared with other retailers, even as consumers slashed spending.
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By GlobalDataCostco has the ability to challenge the dominant chains of Woolworths and Coles who old an 80% market share for packaged groceries.
The two recently came under scrutiny from a government inquiry that found barriers to new entrants to the market.
In addition to Costco, privately owned Aldi and Franklins said they had been blocked from new shopping centre sites because of landlord deals with the big two players.
“The inquiry acknowledged that there is a need for more competition in the retail market here,” Noone said.
