Costco's Australian Market Performance
Costco has reported higher profits in the Australian market compared to Aldi, despite operating fewer stores. In the 12 months ending August 31, Costco generated nearly $12.6 billion in sales from bulk-packaged goods, clothing, technology, and other merchandise. This occurred as consumers diversified their grocery spending in pursuit of value.
Operational Footprint and Expansion
Costco currently operates 15 warehouses across Australia, with two additional stores planned for Victoria and Western Australia in 2027. The company's long-term objective is to establish 35 locations nationally. The first Australian Costco store, opened in Docklands, Melbourne, in 2009, has consistently ranked among the top-performing stores globally within years of its establishment.
Retail strategy consultant Jeremy Barker noted Costco's strategic site selection and effective operational execution, which provide branded goods at competitive value.
Financial Outcomes
Financial reports submitted to the corporate regulator indicate that Costco achieved $499.2 million in after-tax profits. This figure exceeds Aldi's reported profits of $403.7 million in 2024, despite Aldi's Australian sales reaching $13.3 billion across more than 600 stores. Both retailers are recognized for their distinct offerings that appeal to various Australian shoppers.
Market Context and Competition
Supermarket chains Woolworths and Coles have implemented price reduction strategies following consumer and political criticism regarding pricing practices. During the ACCC's supermarket inquiry in late 2024, Coles chief executive Leah Weckert stated that Costco's openings significantly impact traditional supermarket sales, with a single Costco store potentially achieving six to eight times the sales of a typical Woolworths or Coles outlet. The Albanese government has since amended the Food and Grocery Code, effective July 1, to prohibit price-gouging and ensure reasonable margins.
Costco's Business Model and Offerings
Costco's business model, established in 1983 by co-founders Jim Sinegal and Jeff Brotman, generates over 60% of its operating profits from membership fees, which were raised to $65 in September 2024. The company maintains a maximum mark-up of 15% on its products. It operates over 900 stores across 14 markets globally, with the majority (623) located in North America.
Popular items at Costco Australia include cleaning supplies, toiletries, and products from its private label brand, Kirkland Signature, such as 3-ply toilet paper, rotisserie chicken, baby wipes, and bulk nuts. In 2025, Costco's beef and pork received awards from comparison website Canstar Blue for overall customer satisfaction in the supermarket meats category.