Costco, One of the most underrated retailers in the country, very rarely gets covered in Retail Week.

One of the most underrated retailers in the country very rarely gets covered in Retail Week.

Although it might be classed as a wholesaler, which may explain its absence from Retail Week, Costco is a phenomenal business.

For my FMCG clients, it is a hugely significant route to market - not just targeting small businesses and caterers, but also a veritable legion of end consumers who treat it as an alternative retail channel.

It is no great surprise that the most frequent objectors to a new Costco opening are Tesco and Asda - the American business has quietly and efficiently constructed a national alternative to supermarkets.

I am minded to write of Costco on the back of Morrisons’ recent opening of a new concept store in Preston. With its cash-and-carry style merchandising and case discounts, Morrisons is attempting to meld the strengths of the Costco model with its own heritage of supermarket retailing. Based on the pictures I’ve seen, the attempt looks like a stylish and effective hybrid.

It is no coincidence that one of the very few bright spots in Carrefour’s global business is Atacadão - a cross-breed of hypermarket and cash and carry in Brazil. Shoppers the world over are expressing enthusiasm for the supermarket/cash-and-carry hybrid, so one imagines the Morrisons pilot might meet some success.

Costco itself continues to go from strength to strength. With entry into Spain and France on the agenda, it is poised to become a major European player. In the UK, it continues to steadily open stores and its esoteric online offer (£400,000 diamond rings and £37,000 Miro sketches) is being continually padded out with new SKUs in food and non-food.

From a shopper perspective, the concept continues to deliver. Great value, ease of shopping and a purity of purpose mean the stores are a joy to navigate. Like Aldi, the chain is in danger of becoming a victim of its own success in terms of trying to park or get through the checkouts.

One might dismiss it as a wholesaler, but Costco is causing our grocers serious headaches. And its hotdogs are awesome.

 

Topics