Costco sees growth story in Asia region
The Asia-Pacific region has established itself as an important centre of growth for North American discount retailer Costco.
Australia has been singled out for a drive to sign up new members as shoppers embrace its club membership model.
During an earnings update for its second-quarter performance, Costco revealed plans to open 14 warehouse stores between now and September 1, the end of its financial year, of which half would be in Australia and Asia.
The focus outside its home base of North America is already paying dividends. Costco's second-quarter results showed international sales were up 6 per cent for the period and 7 per cent for the first half. This compares with 5 per cent growth in the second quarter for its US stores, and 6 per cent for the half.
Australian consumers have been strong supporters of Costco since it first opened a warehouse store in Melbourne four years ago. The cheap prices for members for bulk items has helped provide some competition, along with Aldi, for Woolworths and Coles.
It was recently revealed that Costco Australia posted a maiden profit in 2011-12 of $9.73 million from its three stores in Melbourne, Sydney and Canberra, and managed to more than double its revenue to $609.5 million.
During a presentation to US analysts, Costco chief financial officer Richard Galanti said memberships were up 1 per cent for the quarter globally.
"It's mostly reflective of the very strong sign-ups we had internationally, most particularly in Australia and Asia," Mr Galanti said.
The number of Costco members rose from 37.4 million at the end of the first quarter to 37.9 million. Including extra cards and spouse cards, it went from 68.2 million to 69.1 million. Costco Melbourne and Sydney are said to have more than 100,000 members each.
Costco operates 622 warehouses across the world, including 448 in the US and Puerto Rico. Eventually it plans to open as many as 20 outlets in Australia.