Costco, the second largest retailer in the world, next to Walmart, is set to launch in New Zealand.
Development will begin early 2020 in Westgate, Auckland with completion expected around 2021.
The huge chain will offer competitive bulk discount on groceries, electronics, petrol, hearing aid services & tyres.
Will this have an effect on the electronics industry in New Zealand?
It will be interesting to see how it plays out but market experts believe electronics will be hit & miss, with some items being much cheaper & others not so competitive. Kiwis have an unhealthy habit of 'buy now pay later', taking advantage of 5 year interest free deals through the likes of Harvey Norman.
It's worth noting that CostcoInsider.com did a price comparison in store at Costco & online at Amazon on select electronics and other items. On some items, Costco beat Amazon by a whopping margin. For example, Costco listed a KitchenAid 6 Quart Bowl Lift Mixer for $269.99, while the same item was $449.99 on Amazon. That’s a huge price difference.
Meanwhile, Costco’s price on the Braun Series 3 3-in-1 Electric Shaver was $59.99. The Amazon price? $94.99 — that’s 43% more expensive!
Do kiwis prefer to shop online?
Everything is going online now. Perhaps Costco are tapping into a dying market? Giants like online-retail-store Mighty Ape are well established & will be hard to beat in the electronics market, offering overnight delivery, great prices & excellent customer service.
Auckland has congested roads & an outdated transportation system, shopping in-store becomes less appealing to kiwis as the population grows.
Costco's main focus is the food industry & since there are currently only two major players in New Zealand it's likely to drive prices down at Pakn Save, New World & Countdown.
Costco is expected to create a ripple to Auckland's grocery shoppers but any significant disruption to the NZ electronic market is more likely to be felt 5-10 years time when Costco branch out to Christchurch & Wellington.
Summary: What you need to know!
- Annual subscription of around $60nzd is required to shop there.
- The largest savings will be seen when buying in bulk.
- Little or no threat to the electronics industry.
- Will make grocery shopping more competitive, lower grocery prices for kiwis.