Costco plans to open 40 UK mega-stores
Monday 09 August 1999
Costco's plan came as Asda announced a fresh round of price cuts yesterday, which will see it invest pounds 30m in lower prices on 100 lines including Coca- Cola and Nescafe coffee.
The new initiative is part of Asda's "Rollback" scheme under which it has undertaken to cut the price of 4,000 product lines by the end of the year.
Costco, a US-listed company in which Littlewoods has a 20 per cent stake, currently has seven stores in Britain with planning applications outstanding for a further six.
Although the company has been frustrated by a planning process it describes as "slow, expensive and uncertain" it hopes the situation may be about to change.
Jim Murphy, managing director of Costco UK, said: "We would like a more balanced view from the Government. We are interested in the regeneration of brown-field sites such as former factories. We create around 150 new jobs per store and we are offering low prices. We bring an extra element of competition."
Costco has a membership warehouse format similar to Wal-Mart's Sam's Clubs in the United States. Trade buyers are charged pounds 15-a-year membership with a fee of pounds 20 for private members.
The huge 100,000 square feet stores stock discounted brands such as Cartier watches as well as food items sold in bulk such as bottles of Coca-Cola, baked-beans and fresh foods.
Costco reported buoyant figures in the US last week. Sales in the four weeks to 1 August were up 14 per cent on last year to $2.1bn. Like-for- like sales were up by 11 per cent.
Mr Murphy said UK like-for-like sales were "even better" and that the UK operation is making healthy profits.
The first warehouse clubs opened in the UK about five years ago and were tipped to change the face of British retailing. But their development was constrained by the planning regulations and some operational problems.
Now, with an increasing emphasis on value for money among UK consumers, Costco believes the warehouse club's time has come.
"It's not going to change the face of UK retailing but it is a viable concept that has a place in the distribution network," said Mr Murphy.
Costco has 290 stores, mostly in the US and Canada. It recorded profits of $460m (pounds 289m) last year on sales of $24.3bn (pounds 15bn).
- 1 Half of young women unable to ‘locate vagina’ and 65% find it difficult to say the word
- 2 Perez Hilton apologises for Jennifer Lawrence naked photo leak
- 3 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
- 4 Mexican woman becomes world’s 'oldest person' at 127
- 5 Jennifer Lawrence 'naked sex video' will be leaked threatens 4Chan celebrity photo hacker
Rotherham child sex abuse scandal: Labour Home Office to be probed over what Tony Blair's government knew - and when
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Ashya King: Parents of five-year-old boy refused permission to visit him in hospital and denied bail at Spanish court
With Douglas Carswell joining Ukip, my party has taken another giant step forward
When elitism grips the top of British society to this extent, there is only one answer: abolish private schools
Ashya King: 'Cruel NHS has not given us the treatment we need', says father of five-year-old with brain tumour who fled to Spain
iJobs Money & Business
£40000 - £50000 per annum + benefits+bonus+package: Harrington Starr: SQL Impl...
£85000 per annum: Harrington Starr: Head of IT (Windows, Server, VMware, SAN, ...
£40000 - £50000 per annum: Harrington Starr: You will not be expected to hav...
£500 per day: Harrington Starr: SQL DBA/Developer SQL, C#, VBA, Data Warehousi...