Pork floss, crab and chicken: Costco reveals top sellers. Video / NZ Herald
Its $100 million-plus store has only been trading for five months but accounts are out for the New Zealand operations of giant US membership-only retailer Costco Warehouse.
The local company, whose debut Kiwi store is at Westgate, filed annual accounts in this country on Friday afternoon.
And because it’s overseascontrolled, we can read those accounts, see exactly how much money it’s making - or not - and precisely how.
A not-unexpected bottom-line loss of $12.5m was recorded for the August year.
That’s due to the business not being fully operational but being a set-up and its warehouse yet to sell a single item by balance date.
Costco's first NZ store at Westgate opened in September. Photo / Supplied
Before people can enter the store, they must show their Costco cards which have photo IDs.
Members can only bring one adult with them into the shop as a guest. Staff at Westgate direct people who don’t have cards to join at an entry membership desk before they are allowed to shop.
Yet this period to August was before customers could physically walk into the store or buy in the warehouse.
Revenue recorded those buying Costco cards and preparing for the September warehouse opening.
Only Costco Fuel was operating at Westgate in the year to August 2022, having opened last April. Yet it only traded for about four months pre-balance date.
Precisely how many Kiwis have paid $60 individual membership fees is undeclared in the accounts. No precise numbers are given. Nor do Costco chiefs in Sydney say how many Kiwis are members.
Costco Australasian boss Patrick Noone at the new store. Photo / supplied
Cost of sales was recorded as $20.3m and general and administrative costs were put at $13.3m.
An operating loss of $13.2m was recorded for the year, although a change in fair value of financial assets was put at $484,000.
Total current assets are recorded as being $60.9m, up on the $16.4m in the 2021 year that the business had established itself here but had not begun to trade from the Westgate store.
Accounts record $8.3m being paid in salary and benefits, compared to $1.4m in the 2021 year.
Costco Wholesale New Zealand was incorporated in 2018. Companies Office records show that US-based Costco president Walter Jelinek is also a director of the NZ business.
Kiwi Costco has big links with Aussie Costco. Related party expenses of $38m are recorded with Costco Australia and $2.1m with Costco US.
The New Zealand company operates under a trademark license agreement from Price Costco International Inc and Costco Wholesale Corporation.
The license grants the local operation the right to use certain Costco trademarks, private label marks, domain names in exchange for a royalty fee, the accounts say.
To establish here, the local business got a $30m handout from the US. That payment was recorded as “subsequent events” in the August 2022 accounts.
“Costco Wholesale Corporation, the parent entity of Costco Wholesale New Zealand made two capital contributions totalling $30,000,000 to the company,” the latest accounts stated.
Accounts were audited by KPMG Sydney on February 3 and posted on the NZ Companies Office at 3pm on Friday.
No commentary comes with the accounts: nothing about how the company is pleased to be operating here, welcomes customers to its unique offering, looks forward to successful partnerships with local suppliers and manufacturers, how it’s forged new links and created a new offering, or so on.
The information is only a bare-bones nitty-gritty financial report.
New Zealand's first Costco store in Westgate. Photo / supplied
Costco New Zealand Pharmacy, incorporated in August 2021, has filed its accounts but they’re not yet available online.
Australasian Costco boss Patrick Noone is also a director of that company along with Grant Bai of Remuera.
Bai owns 51 per cent of the pharmacy business and Costco Wholesale New Zealand owns the rest. Bai is well-established in the sector.
His LinkedIn profile says: “I am passionate about creating opportunities to improve the health and wellness of our communities and have previously led the pharmacy and medical teams during a period of rapid growth with New Zealand’s leading primary health care provider, Green Cross Health.”
Costco Wholesale New Zealand’s registered offices are level four, 40 Lady Elizabeth Lane, Wellington - the offices of New Zealand lawyers Bell Gully.
Noone signed the accounts along with Piere Riel, the executive vice president and chief operating officer of the business.
