By Patrick Avenell
At the opening of Metcash’s first Value Depot warehouse outlets in Brisbane today, CEO Andrew Reitzer promised to “match or beat the price” of its competitors, with Costco singled out and named as a target.
In addition to being a warehouse sales venture to compete with Costco, Masters and Bunnings, the Value Depot concept is also a relaunch of the Campbells Cash and Carry brand, which has faded from public conscious over the last two decades.
“Value Depot redefines the bulk wholesale warehouse concept in Australia offering a great range and cheap prices to both consumers and resellers,” Reitzer said.
“The opening today effectively relaunches the Campbells’ brand in Australia and will re-engage our traditional base of independent retailers and operators who want to buy in bulk at great prices for their own outlets.”
Reitzer said Value Depot will stock over 10,000 lines of products and 35,000 different SKUs, in categories including dry groceries, FMCG, fresh food and appliances. Metcash’s media release asserts that Value Depot will be “matching or beating the price of the national chains and offering strong discounts with bulk purchases”.
Metcash also explained why Eagle Farm was selected as the launch venue:
“Eagle Farm was chosen as the first location for Value Depot in Australia because of the convenience for people travelling in the 70,000 cars that pass by on the Gateway Motorway every day, and easy access for the immediate customer catchment of close to 25,000 people.”
The subject of the email carrying the media release makes it clear which competitor Value Depot is seeking to take share from: “Metcash’s Value Depot opens this morning to challenge Costco in Australia”.
This challenging of Costco will be facilitated by fast growth of the Value Depot concept, with Metcash signalling its intention to convert at least some of the 18 existing Campbells Cash and Carry stores to the Value Depot format. This will create a network of outlets to take on the rapidly expanding Masters chain and the slowly expanding Costco group.
The nearest Masters to the new Value Depot is in Tingalpa, around 10 kilometres from Eagle Farm. The nearest Costco store is in Lidcombe, in New South Wales, around 921 kilometres from Eagle Farm.
Unlike Costco, which charges membership fees, there are no joining or annual costs associated with Value Depot. Customers must, however, be ABN holders.
“Value Depot will deliver a total solution for small operators, especially those in hospitality and convenience sectors, who can order almost all the stock and merchandise they need through a one stop shop.”
Inside Value Depot outlets are stores-within-the-store, including Sweet Spot (confectionary), Catering Connection (hospitality), Baby Boulevard and Auto Car Care.
The new Value Depot warehouse is located at 44a Amy Johnson Place, Eagle Farm, Queensland: