ition in the marketplace continues to get better and better,” Coscto Australia’s country manager Patrick Noone told Inside Retail.  That’s not to say the business hasn’t been hit by Covid – 10 per cent of Costco’s local workforce were absent just weeks ago, and the business is still battling fresh and packaged food shortages. This has been difficult for Costco as, being an international retailer, it often brings items it believes are ‘best in market’ from other countries.  Stock shortages from the US, Asia and Europe have meant Coscto has been able to stock more local items to make up the difference, although it is running low on the business’ private label Kirkland products, which aren’t easily replaced. “People are disappointed that they can’t get their favourite brands, but we have full pallets of merchandise [and] can substitute for local brands or Asian brands,” Noone said.  Taking its operations online For the last four decades, Costco has been known as a physical large format retailer. This changed in Australia when the brand launched its online offer in 2020 – coincidentally just weeks before the pandemic first kicked off and Australia was plunged into lockdown. “I’d love to say it was strategically planned that way, but it wasn’t,” Costco Australia’s merchandise manager for e-Commerce Sandi Corthnwaite told Inside Retail.  “We had been working on it for 18 months or two years beforehand. It was challenging, because it was a brand new business with a brand new team, and the way people shopped changed almost overnight.” When it launched, Costco’s online store was a more simplified extension of what you’d typically see in a Costco warehouse, and the goal has been to expand on that range and functionality to get it to a point where it’s complementary to the physical business. But, as the pandemic has taught many retailers in the last few years, disruptions can also lead to opportunities. “There are opportunities for us going forward to add things like grocery delivery,” Corthnwaite said.  “We’re not in that space yet, but that’s certainly something we’re looking at, as well as bringing the larger warehouse experience to online shoppers – delivering big, high-cube items directly to members would be a huge benefit. There’s a real convenience factor there.” And, with fresh produce delivery on the cards, the business is now looking into how it can integrate ship-from-store technology into its operations, which could open up another delivery landscape, said Corthnwaite. At present, Costco’s online operations are handled by one major distribution centre in Sydney, and two further third-party sites in Sydney and Melbourne. Shipping goods directly from each store could broaden the reach of what the business can realistically offer online. “We’re navigating through that space, and there’s a lot out there. The trick will be how we can stay true to [the brand] and make sure our members get a unique point of difference and great value,” said Corthnwaite. Navigating new shores Last year Costco announced it would be launching its first store in Auckland, which will launch in August. But the country could also get two further stores in the coming years as the business scales up – one in Christchurch, which has already been approved, and one in Wellington. “We see a phenomenal opportunity for some additional competition in the New Zealand market, and using the same philosophy we’ve used here [in Australia] will work really well,” Noone said.  “The competition in food in particular is pretty narrow, and in non-foods it’s very narrow. So bringing global brands in the price range that we can will be very successful there.” Corthnwaite added that it would also open up the potential of more local New Zealand brands to feature in Costco New Zealand, Australia, and potentially more international markets, as they get their operations up and running in the region.