Costco says ‘not yet’ to China
US warehouse club format retailer Costco says it mulling entering China – but the time is not right.
Costco EVP and CFO Richard Galanti told an analysts’ briefing this week that it continues to contemplate opportunities to take its unique format into the world’s largest consumer market but “we’re not ready to move”.
“We recognise it’s a giant market, and every few years senior management goes over there and looks around,” he told the briefing.
“While we’re confident about what we do, and we’re very hands-on, we’ve got a lot of things going on in a lot of directions. We know somebody’s going to get there first, but when other people have gotten other places first, we do fine when we come in, so it will happen at some point, though I don’t know when. But we’re not ready yet.”
Meanwhile, Costco remains focused on European expansion as it looks forward to a time when international sales will exceed those of its US home market.
“All of Europe is certainly an opportunity for us.”
Costco this week reported its first quarter net income rose 16.7 per cent to US$496 million on sales up seven per cent to $26.3 billion. Its average transaction size rose 2.5 per cent and the frequency of shop by 4.5 per cent.
Organics, food, confectionery, delicatessen and liquor were standout categories.
Costco opened its seventh store in Australia in the quarter and another in Mexico. It plans to open its second store in Spain in the second half of the 2016 fiscal year and is still negotiating an entry into France.