Australian shoppers have been crying out for a low cost alternative to buying from supermarket giants. Now, with the opening of budget groceries and goods retailer Costco in Melbourne, locals there have had their wishes granted. But are the savings as good as they say?
US mega-retailer Costco
has landed in Melbourne, promising to fulfil the dreams of cash-strapped shoppers by selling top brand products at wholesale prices. Bargain shoppers can buy everything from supermarket items to designer goods (that's right — you can buy a Louis Vuitton handbag with your loaf of bread!). Along with food, clothing and accessories there are nappies, appliances, TVs, automotive supplies and just about everything in between — all for well below recommended retail price.
While the savings made by shopping at Costco are written on the wall, there are a few catches that shoppers need to be aware of, which — depending on your situation — may outweigh the positives of paying less.
Costco is a shopping club, which means to shop there you must pay an upfront (and annual) fee of $60. Paying money to spend money? It sounds crazy, but for regular Costco shoppers the fee ultimately doesn’t amount to much, as the money is fairly quickly redeemed in savings on their grocery bill. The key is to shop at Costco often (at least once a month) to get the most out of your membership. If you only shop there once a year, it may not be worth it. Charging a membership fee is a clever way for Costco to ensure shoppers return to the store regularly.
Also, for every membership card bought, a second card can be given to a friend or family member living at the same residence for free. In effect, for many people the membership fee really only costs $30.
Buying in bulk
Buying in bulk may suit families who live in houses with plenty of storage space. But for singles, couples, students and anyone living in smaller apartments, buying in bulk is difficult. Where do you put the tower of 96 rolls of toilet paper in your one-bedroom flat? The answer — if you’re still keen to bulk up — is to shop with friends. But beware of the Costco rules…
Shopping with friends
While Costco only allows members to make purchases at their store, members are welcome to take two friends along with them for the ride. Regular Costco shopper in the US, Fiona, says that there’s no stopping a large group of friends with two or three Costco memberships between them doing their weekly groceries and divvying the purchases once they leave the store. “It takes a bit of organising, but it’s worth it in the end,” she says.
Worth the drive?
Costco is located at Melbourne Docklands, the equivalent of Sydney’s Darling Harbour, which means for people living out of town the cost of petrol and tolls to drive to Costco might add those dollars saved back onto your grocery bill. Try car-pooling with other Costco members from your area to make the trip worthwhile (and make sure you have a big car boot!). Also keep an eye on the time: parking is free for the first two hours, then $5 per hour thereafter.
The reason Costco is able to keep prices so low is that they have a no-frills approach, reducing overheads to a bare minimum. These savings are then passed onto the customer. But with low prices comes a low level of luxury. Costco sells clothing, but has no change rooms; and if you’re in a rush, there’s no express checkout to put you through speedily. Shop with low expectations, and you won’t be disappointed.
Before all of you bargain hungry Sydneysiders pack your bags and hit the road to Melbourne, try holding out until the end of next year. While nothing is set in stone yet, the wheels are in motion to open a Costco outlet in Sydney in late 2010. The proposed address is 15-21 Parramatta Rd, Auburn — a much shorter drive than Melbourne!
Have you shopped at Costco? What are the pros and cons in your view? Submit your comment or email firstname.lastname@example.org