US DISCOUNT retailing giant Costco has tipped another $25 million into its growing Australian operations, on top of an $83 million capital injection made in 2008 as the business works towards opening its maiden store in Sydney.
Costco Wholesale Australia opened its Melbourne outlet in the Docklands precinct in August.
According to Patrick Noone, local managing director of the Melbourne store, customers are buying across its lines, from toilet paper, clothes and food to $5000 and $10,000 diamonds and one bottle of limited edition scotch with a sticker price of $20,000.
It comes as Woolworths and Coles battle it out for market share and at the discount end of the sector newer entrants like Costco and the German supermarket chain Aldi tempt consumers to their low-price offering.
Aldi recently unveiled a net profit of $72.6 million for the 2008 calendar year.
Costco relies on a model by which consumers must pay an annual membership fee to shop at the warehouse outlet.
Documents lodged with the Australian Securities and Investments Commission show Costco Wholesale Australia recorded a $2.36 million loss for the year to August 31, 2008, against a $1.43 million loss in 2007. As at August 31 the company had $1.4 billion equity.
The 2007-08 accounts only include two weeks of operations from its Melbourne store.
The accounts also state that in June the US parent agreed to fund its Australian business with $25 million.
Costco Wholesale Australia has spent more than $70 million to date to build its Melbourne outlet and the group is expected to spend upwards of $55 million on its Sydney store, planned for Parramatta Road in Sydney's west.
A typical Costco in the US can generate annual sales of $US140 million.
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