Tuesday, 26 November 2013

The Costco Special

As sad as it may sound, we are definitely an Aldi family. As testified by Aldi being the first ever brand name my son was aware of, we buy the bulk of our groceries there. We do so for good reasons: the quality is good and the prices so significantly lower that buying at “regular” supermarkets has turned into a vomit inducing affair.
There is more to Aldi shopping than groceries, though. Wander around our house and you will see many an Aldi artefact, from plates to a hammock and a trampoline. These are the Aldi specials, items that come on sale for short periods and then disappear. And these Aldi specials are special: while some proved too lacking in quality, others revolutionised our lives. An Aldi DVD player carried the bulk of our home entertainment duties back when DVD players were expensive; an Aldi set top box had introduced us to digital TV. The list goes on, but the point remains: through their low prices and a very generous return policy, Aldi specials make trying new things out cheap and easy. So much so that more often than not, we choose to fully embrace that new special.

Which brings me to discuss Costco.
This past weekend we visited Costco again, after not doing so for six months. It’s not that we dislike Costco, it’s just that it’s all too hard. Between the crowds and the parking situation, one needs something special to justify the venture. But we did so anyway on Sunday.
As it turned out, we did so in the company of many an Australian. We arrived less than five minutes after the shop opened and already the parking lot was generally full. By the time we made it to the tills, a couple of hours later, the queues were so bad they snaked three quarters of the way back into the depths of the shop.
Probably the result of my experience at Israeli queues, I hate queuing up and generally do my best to avoid the experience. However, this was your classic Aussie queue: people were nice to one another, exchanged jokes and such, and allowed me to both ponder and play with my phone. Just to make it clear, absolutely no one was attempting to pull an overtaking, claim they are only here for a prescription, or pretend they’re unfamiliar with queuing etiquette. Given the hundreds of people involved here, this is nothing short of amazing.
It was while queue pondering that it occurred to me. There is a reason why Costco is as popular as it is in Australia, and that reason is closely to do with our Aldi specials experience: to the average Australian consumer, Costco is a single giant repository of Aldi specials!

With that conclusion in mind, I believe it is clear Australia’s traditional players are in trouble. Clearly, Aussies are growing more aware of the availability of good stuff for less; therefore, the likes of Target and Myer will have to adapt. They can either do it through pricing, specialisation or focus on exclusive brands. However, as long as they’re on business as usual mode while Costco continues expanding, they are doomed.

Image: Two shoppers admire a very Costco sized Teddy Bear (yours for $200)

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