Twelve months ago, the opening of a gargantuan Costco store in West Auckland signalled the start of a new era of shopping in New Zealand.
Costco arrived with the promise of cheaper prices and bulk-buying bargains, and Kiwis duly obliged by forking out the annual subscription fee to get a slice of the action.
Ben Goodale, the founder of marketing firm Quantum Jump, tells The Front Page podcast there are no signs of Costco slowing down any time soon, if his recent visit to the store was anything to go by.
“I’m a bit of a sucker for the dollar hot dog and Coke, which is a real marquee thing that Costco offers,” says Goodale says.
“I had to wait about 20 to 25 minutes because it was just so busy. That just gives you an idea [of the popularity of Costco]. It’s just another weekend in Auckland, and Costco was heaving.”
There were initially fears that Costco would take business away from the surrounding retailers, but Goodale says that this thinking overlooks what the company actually brings to this area.
“If I had a retailer near them, I’d be delighted because they’re a magnet to the [NorthWest] shopping mall. I think the challenge to retailers around there is just to get people to come to them as well on their visits. And that’s a marketing challenge, which I don’t know how many have taken on. The sheer volume of people going there as a destination is an opportunity.”
The success of Costco has already led to questions about whether we could see other major brands follow suit by launching in New Zealand.
“We’ve been very lucky the last few years in that we’ve had quite a few major retailers from overseas come in. We’ve had Sephora, Zara, and we’ve got Ikea positing to be ready at the end of 2025.”
Despite this flurry of international retail activity, Goodale says most of these brands won’t have the broad appeal of something like Costco – and this is something that won’t be lost on other retailers thinking of coming into the country.
“Although we’ve got brands like Sephora and Zara, they haven’t really got the market depth here to necessarily introduce the range you might see if you were to go shopping in Sydney, the States or Europe.”
Not every brand that comes to New Zealand will be able to attract a large enough customer base from our small population to justify the massive investment in coming here and then shipping goods to their stores.
“Brands are coming here now because they run out of other places to open up in. We’re not usually the first choice for where to go because of our market size. There’s only so much [brands] like Ikea or Sephora [are] going to make in a market like New Zealand.”
So, which other brands could make decent money here? And how likely is it that we’ll see them arrive?
Listen to the full episode of The Front Page to hear more insight and hot takes from Goodale on the impact of Costco.
The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5am. It is presented by Damien Venuto, an Auckland-based journalist with a background in business reporting who joined the Herald in 2017.