US discount retailer Costco's beachhead in Australia, its warehouse-style store in Melbourne's Docklands, is generating more sales than the average North American Costco. The Australian arm has been handed a further $40 million by its parent to fund aggressive growth. And the new kid on Australia's supermarket block hasn't been put off by the fresh price war being fought between Coles and Woolworths, claiming shoppers viewed differently its discount and bulk model, compared with the cheap offers of main rivals.
Costco Wholesale Australia has reported total revenue of $165.9 million for the 2009-10 financial year, eclipsing the average turnover of one of its American stablemates which typically produce annual sales of $145 million. The results for the year to August 30 represented the first full-year of operations for Costco in Australia.
Costco's Australian managing director, Patrick Noone, told Business Day the supermarket, which relies on a membership model, had already signed more than 100,000 members in Australia and was performing strongly. ''It's probably a little bit higher than the average North American [store] I would expect,'' Mr Noone said.
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However, the business still recorded a loss for the year, with its net loss falling to $11.43 million from $14.13 million as its US parent invested more capital in securing a new site for its second store, planned for Parramatta Road in Sydney's west. It recently secured a site in the Majura Park Retail Precinct at Canberra Airport for its third warehouse.