By Paul Hayes

SYDNEY, NSW: Supporters of Costco’s expansion into western Sydney have dismissed claims that the new store will have a detrimental effect on existing retailers.

Costco is currently awaiting an approval verdict from the NSW Department of Planning for its Auburn store, which will be the group’s second in Australia.

According to the Shopping Centre Council of Australia executive director, Milton Cockburn, existing retailers have little to fear from the proposed new Costco store.

“It is inevitable that the arrival of a new retailer will have an initial impact on existing retailers, but that is true of any new store opening, not just Costco,” Cockburn said.

“I wouldn’t say [it is] a negative effect.”

The proposal for the Sydney Costco store is for a $59.7 million, 14,000 square metre warehouse store on Parramatta Road, at Auburn in the city’s west.

The store would be the company’s second in Australia after the successful opening in Melbourne’s Docklands precinct last year.

But according to Cockburn, because of Costco’s relatively unique retail platform, heavily discounted bulk goods available to customers on a paid membership basis, a new store is unlikely to draw customers from the same pool as surrounding retailers.

“In most cases the trade zone for any store would be limited to around 10 kilometres.

“But I think Costco would probably draw its customers from throughout Sydney, so its impact on nearby retailers would be diluted to the extent it is drawing from a wider catchment area.”

If approval is granted in the coming weeks, Costco has said the new store will likely be up and running in approximately 12 months.

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