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It's official – Costco has confirmed it will open a second Melbourne store in the eastern suburb of Ringwood.
Nearly three years after the company opened its first location in Melbourne, the retail giant has expanded into both Sydney and Canberra. As part of a nation-wide plan, Costco has now started doubling up, with Melbourne the first city to get its second location.
The Ringwood move has been rumoured since as early as last year.
This opening will have a lot in common with the Sydney store, located in Auburn. The first Melbourne store is in Docklands, away from other retailers. This time it will be in the middle of suburbia, where plenty of SMEs will feel the effects.
Retail Doctor Group managing director Brian Walker says businesses need to be prepared.
"They really need to focus on their differentiated offer," he says. "Focus on service levels, loyalty programs, and so on. They should work their database, and figure out the value they add to the surrounding area."
"And what they really need to do is study Costco and then figure out what they need to do. Look at what it's designed to do and then think about the response."
For instance, Walker says, Costco isn't designed to be a company focused on customer service. Businesses in the surrounding area should focus more on investing in staff, so they can offer a complementary offering to Costco.
"They need to look at the way customers move through the stores, look at the staffing levels, and then try and identify those points of difference they can cover."
"Costco is not designed to be a very customer service-oriented business."
Last year, the Sydney opening brought a huge amount of foot traffic to the surrounding area. While businesses may complain about the extra traffic, there are plenty of other things they'll have to get used to as well.
Here are the four things you'll have to get used to when Costco comes to your neighbourhood.
Increased foot traffic
There are going to be a lot of people in your area – a lot of people. Not only will people from the surrounding suburbs be flooding into Ringwood every day, but you'll also see more people from further away. After all, Ringwood sits right on a stretch of freeway where southern commuters have access to the city. They'll just choose to stop at Ringwood instead of going into the city.
Of course, this is an opportunity in itself – more marketing opportunities!
Costco brings some great benefits, and not just for consumers, but businesses as well. If you need supplies or any other sort of product, then a Costco membership is probably a good investment and could save you on some costs.
It's going to happen, and you're just going to have to deal with it. The traffic is going to be excessive, especially on weekends, and there isn't much of a solution. The other consequence of this is parking – people will try to avoid the crowded Costco car park if they can.
While this can be a nuisance, it's also another opportunity – having further to walk means more opportunities for advertising.
One of the main reasons Costco customers are so tied up in their memberships is the huge savings they can make. As a result, if you're selling groceries or any other type of food product in the Ringwood area, then you'll need to prepare for some price erosion. Customers are just going to expect lower prices.
This isn't necessarily a bad thing. You just need to adjust your expectations – as Walker says, focus on your customer service offering. If you're being threatened by Costco, then identify its disadvantages and strike back.
There are major delays due to customers attempting to attend the premises of new wholesale retailer Costco.
Police are urging motorists to avoid the area and delay travel if possible.
Motorists are also asked to remain patient if they are caught in traffic congestion.
Streets affected include Silverwater Road, Parramatta Road, John Street, St Hilliers Road, Homebush Drive and the M4 Westbound.
OMG!! so How Can I get there ?
Here is a little tip.
Nurse Marilie Guevarra and her husband Miguel took a day off and spent more than $200 on groceries.
"Prices are cheap. I paid $10 for 12 large muffins when they usually cost $3.50 each at other stores.
I paid $10 for a large tub of strawberries and $10 for a 1kg pack of chicken. Prices are definitely cheaper than Woolworths."
Truck driver Jerry Qura spent $191.47 on groceries, including $32 for a gas cylinder which he said was $20 cheaper than he usually paid. read more...
How about a 3TB USB hard drive for $169? (27% cheaper than we could find it anywhere else.) Or a high-powered Intel Core i7 HP dv6-6012tu notebook for $699.99? (23% cheaper than the lowest price we could find elsewhere.)
We've catalogued and compared the best tech deals we found at the end of this article.
What it's like inside Costco?
Inside the cavernous warehouse in Sydney's bargain outlet suburb of Auburn, Costco is a bit like a cross between an Aldi, a Bunnings and an Ikea. It's Aldi in that stuff is sold on pallets. There are no neatly stacked shelves with a bit of this and that like in Woolworths.
Costco is like a bizarre and frantic mix of Bunnings and Aldi, and this morning about 1800 customers per hour were going through the checkouts. Some groceries have major savings, while other items are comparable to what you’d see at Woolies. And tech? There’s lots of it.
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