American bulk-goods chain Costco has received the green light to go ahead with the opening of its first Queensland store, as the company prepares for further expansion around Australia.
The Queensland government yesterday approved the multi-million dollar Costco development at North Lakes, despite resistance from shopping centre rival Westfield.
The decision follows a report commissioned by the state government into the retailer.
The Australian reported this morning the report by consultancy Foresight Partners found only 40% of Costco’s range was carried by major supermarkets and even less by smaller convenience stores, indicating it would not threaten the existence of small grocers.
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Foresight Partners was contacted by SmartCompany this morning, but no reply was received prior to publication.
Costco Australia managing director Patrick Noone told SmartCompany the construction of the centre would create about 350 local retail jobs and 160 construction jobs.
“Costco will bring a new element of competition and retail to the market. We’re also a trade player, so we’ll bring a new level of competition for small business and restaurants too,” Noone says.
Queensland deputy premier and minister for state development Jeff Seeney signed off on the development and said in a statement he’d considered the proposal carefully.
“I did not rush this decision, and I took the time necessary to make sure I was making the right decision for the community and the state.”
“The development will provide new business opportunities in the north Brisbane-Moreton Bay regions and contribute to growing and stimulating the construction industry,” he says.
Seeney said he believes Costco will be good for Queensland.
“I formed the view that this development contributes to the future economic well-being of Queensland, in particular the fast growing south-east region,” he says.
“We need to ensure that applications such as this do not get bogged down in protracted legal proceedings.”
Noone says while development is a bonus for Queensland shoppers, he understands Westfield’s opposition to the store opening.
“Everyone has a right to question the planning laws, it’s just something we work through with the local authorities, and it’s part of the democratic process which we’re happy to be a part of,” he says.
Chief executive of the Retail Doctor Group Brian Walker told SmartCompany Australian consumers have been very supportive of Costco’s arrival.
“Costco perform extremely well in our country. The Melbourne store was one of the best openings in its history worldwide. They’re really the next generation of supermarket. We can expect 15-20 stores in the next five years,” he says.
Walker says current economic conditions have influenced Australians appetite for Costco, especially as it operates on a membership-fee basis.
“A cautious consumer is focused on value. Consumers are currently migrating to Costco and what they do well is there is including an element of the surprise, a super bargain.”
Costco first opened in Australia in 2009 with its Melbourne store. Later this year stores are also opening in the Melbourne suburb of Ringwood and another in Sydney.
Noone says the discount grocer is also looking to open a store in Adelaide.