Costco expected to open six new stores

Bulk goods retailer Costco is expected to build up to six more stores over the next three years as it dips its toe into the Australian market.
The US retailing giant opens its second Australian store in Sydney's west on Thursday, and its third store in Canberra on Friday, as it challenges the dominance of Woolworths and Coles supermarkets.
It opened its first outlet in Melbourne in 2009.
Analysts say the establishment of around nine large warehouse stores nationwide could lead to some price reductions.
But they say it's unlikely to have a "significant impact" on the grocery market landscape, which includes more than 800 major supermarkets.
Costco is expected to offer a limited range of fresh food, clothing and electronics in bulk quantities at a time when consumers are watching their pennies more than ever.
Professor Paul Patterson, an academic at the University of NSW's Australian School of Business, said the big supermarkets would closely watch the US chain, which charges shoppers a $60 annual membership fee.
"Somewhere along the line, Coles and Woolies will feel the impact," Prof Patterson told AAP.
He said it was a good time for Costco to enter the market as price conscious consumers, especially larger families, searched for bargains in a weak retail environment.
Woolworths and Coles would examine their own prices and would act quickly to prevent dominance of their supermarket business being eroded.
However, Prof Patterson cautioned that Costco's prices may seem cheaper than they actually are, despite lower overheads and minimum service levels.
"The very nature of the way they've set up with the barn, buying in bulk, taking it off the pallet, I think would also give the perception that the prices are lower than they are in reality," he said.
"Consumers are going to be more likely to go back there to do repeat business, because they've invested $60 upfront in a membership."
He said the arrival of Costco may entice people to do a monthly shop, forcing existing players to "up their game".
The Australian School of Business says it has analysis of plans by Costco to open up to another six local stores in the next three years.
If stores in the United States are anything to go by, Costco will most likely offer "loss leaders" such as cheap clothing to get shoppers through the doors.
The new Auburn store in western Sydney will have 14,000 square metres of shopping area and 800 car parking spaces, but won't offer express checkouts or dressing rooms.
The chain has reportedly signed up more than 100,000 members at its Melbourne store at Docklands.
Industry estimates put market share for Australian supermarkets at about 40 per cent for Woolworths, 30 per cent for Coles, 20 per cent for Metcash's IGA, five to six per cent for Aldi, with the remaining share split between Franklins, Costco and smaller players.
Costco has struggled to find appropriate sites in prime retail locations, which delayed its Sydney opening.
Deutsche Bank retail analyst Paul van Meurs said Australian retail was in a "pretty tough space" and the advent of well priced stores would not be helpful for the sector.
"The turnover Costco can expect to do and the clientele that they can expect to attract is not going to have a significant impact on the overall grocery market," Mr van Meurs said.
"There's a nuisance factor, but I don't see it being a serious threat in this current format."