Miles said:

Leveraging Tech: 3

I had a look through Costco in Melbourne last week. This is the first Costco in Australia so I thought it would be interesting to gauge the offering versus the local retailers. I am reasonably familiar with Costco from time I have spent in America. The local format seemed to mirror this offering; busy, super – sized trolleys, single entry, show your membership on the way in, familiar shiny cement floors and stacked warehouse shelving presenting a breadth of goods from flat screen televisions, to Sherrin footballs, frozen chicken breasts and laundry detergent. Once the trolley is stuffed full, pay for it and line up at the single exit to reconcile the purchases with the receipt and then out.  

What really did catch my attention and got me thinking more broadly was the stacked aisle of Diet Coke. Ive taken a photo of the 30 packs, I took a photo of the same thing at the Costco in Westminster Colorado over Christmas. I’ve mulled this over for a few days, but Im struggling to reconcile what causes this price differential for the same common product. Maybe it can be partly explained by recent exchange rate moves or differing tax structures, but regardless I got sticker shock comparing the two. It drew me back to this sense that there are a number of industries locally that seem to earn excess returns; it is my bias that moving forward these margins will only head in one direction.  

Diet Coke Westminster, Colorado

Diet Coke Melbourne

Thursday, March 11th, 2010

Yes or no?