Costco, what's the fuss?

As of the 17th of August, Australia opened its first Costco in Docklands, Melbourne. For those who do not know what Costco is, it's a gigantic, all-purpose, wholesale store. The type of items sold is like a cross between Big W and Safeway, but what makes Costco different is the opportunity to buy in bulk (and thus save) and the pre-requisite of an annual membership subscription.

Naturally, when Costco opened, a lot of hype and talk was created. It was all over the radio, the news, even TV shows that would usually be indifferent towards current local and interstate events. Upon entry it is chaotic and confusing, but once getting through the initial subscription process you realise you've just paid AU$60 to enter a whole new world of shopping.

The possible effects and prospects of new competition is what piques my interest the most. Coles and Woolworths are the Australian grocery heavyweights - even the smaller franchises such as Kmart and Big W are not completely independent and thus serve as branches off of the said heavyweights. As expected, there was a lash out of negative feedback towards Costco prior to opening and onwards; all arguments being anti-consumerist and anti-american at its prime. Many of these people pose valid arguments concerning 'Australian Made' and supporting Australian business. Unfortunately, there are others who have blinded themselves towards ignorance, blinded with unrealistic and ideological theories that are simply logical fallacies.

One of these fallacies is that Australia is turning into the next America. In all honestly this thought also frightens me. I agree with the following: as said by some anti-consumerists there have been numerous precedents where big supermarket chains have literally destroyed local businesses and local economies of small American towns. However this does not neccesarily mean that such a predicament will occur here in Australia, especially if Costco is the predicted catalyst. For one, the location of Australia's new Costco is not replicated in the aforementioned predicament and thus will not create a similar reaction. Its location is inconvenient to most Melburnians - it takes me an hour to travel there and I don't live that far out compared to most. It is a major inconvenience for me to shop there on a regular basis.

The presence of Costco provides the opportunity to break down the quasi-duopoly that is currently still around. Coles and Safeway have ruled as Australia's grocery providers for the last 90 years. Now that there is major competition, (not just independent butchers, fresh fruit markets, IGA etc.) everyone should theoretically benefit from the opening of Costco. For many years, Coles and Safeway have been under fire by the general public and the ACCC. Not only does Costco provide competition against Coles and Safeway, but depending on Costco's performance over the next year, it is setting the example for all chains that have a unique business model and realise that Australia is an opportunity to invest for success.

Sure, 50c toilet paper and 3kg cans of baked beans are nice to those who choose to buy it, but the contrary group need to realise that complaining does nothing; bashing the people who make a conscious choice to shop there is completely unneccesary. Accept and move on. Product-quality is generally better from local-businesses anyway, (not Coles and Safeway, they are not any different from Costco) and good on you if you support them. But during tough economic times, cheaper is better for most and Costco provides this.

On the brighter side the Costco jumbo-sized trolleys provide a good laugh.