The launch of US bulk-buy club Costco in New Zealand shows the country has reached the population density needed to support the arrival of mega-retailers according to an industry expert.
Costco is a multinational retailer which operates a chain of more than 700 membership-only warehouse clubs. Customers pay an annual subscription fee to shop there.
Vinod Kumar managing director of Nido, a furniture and homewares store which will be the country’s largest retailer when it opens this spring, has welcomed the announcement that Costco will enter the Auckland market.
He says retailing in New Zealand has reached its next evolutionary stage with the rise of mega-retailers; which can only exist once the local population reaches a critical mass.
Kumar who helped develop the Mitre 10 Mega concept and has been named Retailer of the Year says while the ‘club’ model will be unfamiliar to most Kiwis, the concept will catch on quickly.
“What we can expect to see from the arrival of other large scale retail operators such as Costco is significantly more competition in the market, particularly when it comes to FMCG products.
“Globally Costco has an almost unparalleled buying power and a formidable reputation for leveraging this to drive down prices, even amongst dominant suppliers.
“For consumers, this is going to mean more choice and better prices, but it is also going to mean a change in the way we think about shopping.
“Large-scale retailers have inherent advantages for price conscious customers and so what this might mean is a trend towards the intermittent, bulk-buying of non-perishable staples such as tinned goods - which will reduce the average grocery bill over the course of the year,” he says,
Kumar says other West Auckland businesses are also set to benefit as mega-retailers become destination stores - bringing more potential customers from around the region.
“It is likely that we will see more visitors come to the area, particularly outside of peak traffic hours and over the weekend when they have more time to spend in store - which may provide opportunities for neighbouring firms as well,” he says.
Construction on the more than 31,000 square metre Nido site at 158 Central Park Dr, Henderson began in October 2018 and is expected to be completed around spring of this year.
About Vinod Kumar:
Vinod Kumar was born in Fiji and studied in Auckland as a Civil Engineer in 1975. During his early career as an engineer, he worked with Fletcher construction on some large infrastructure projects. In 1987, Vinod became a permanent resident to New Zealand and decided to bring up his family and built their first home in Blockhouse Bay, New Zealand.
In 1989 during the recession with no money, Vinod took a leap of faith and bought into his first retail business, Mitre 10 Henderson.
During the early years of his New Zealand retail venture, Vinod realised the opportunity to offer New Zealanders great value and a one stop shop for all Kiwi’s. Vinod’s first business rapidly expanded, and he continued to invest in the business by re-building the Henderson business three times to cater for the rapid expansion of the business.
Thinking outside the square, Vinod was instrumental in the development of the Mitre 10 Mega concept which incorporated everything required for home improvement.
For his achievements as a retailer for over 30 years in New Zealand, Vinod has been recognised by the industry with multiple awards. Not only has Vinod been successful in business but he continues to do a lot of work with charities both locally and overseas.