Patrick Noone: former Costco NZ managing director on whether more grocery retailers would boost competition

A former supermarket leader agrees New Zealand's lacking competition.

The Government's aiming to put supermarkets that would improve competition up for being fast-tracked in new reforms.

It comes as the Minister of Finance confirms there's been talks with Costco to potentially expand across the country in the coming years.

Former Costco NZ managing director Patrick Noone says their West Auckland store's provided some savings.

"In that same precinct, we had Pak’nSave, we had Woolworths across the street and we were able to operate and be extremely competitive with the local market."

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Episode Transcript

Speaker 1 (00:01):
Ever due for see Ellen thankually.

Speaker 2 (00:03):
When Nichola willis a supermarket shakeup will make a difference
in your weekly shop. Yesterday, of course, she announced a
raff of reforms to make it easy for new supermarket
players to open and expand across the country, and it
was clearly aimed at Costco. Patrick Noon is the former
managing director of Costco New Zealand.

Speaker 1 (00:17):
Hi Patrick, Hi, how are you very well?

Speaker 2 (00:20):
Thank you? Now Costco was already planning expansion outside of Auckland.
So has this actually changed anything?

Speaker 1 (00:26):
You know? I'm not aware of the Costco current plans.
I've been retired for two years now, but I can
comment on Before I did retire, Costco was really interested
in New Zealand market. It's a great market. There is
a lack of competition there and Costco can bring winds
and services to the market, add some really really good
savings to our members there. And a case in point,

(00:49):
you know the West Auckland store in that same preceint
we had pack and say we had will Worst across
the street and we are able to operate and be
extremely competitive to the local market. So yes, New Zealand
market is a very attractive proposition. For any food retailer.
I would think around the world, why hasn't Costco.

Speaker 2 (01:08):
If Costco loves it so much, why haven't they actually
expanded thus far? Because they had the Wellington plans and
they had what appears to have been the Rolliston plans
and nothing's actually open.

Speaker 1 (01:18):
Well I again, I'll just couch it and saying I'm
not aware of their current plans. They'll being sort of
out touch with the group there. But at the time,
you think a new country is a very expensive proposition.
It takes a lot of infrastructure in terms of the
buying side of it. In terms of at that time,
the cost of building in Auckland was very expensive. The

(01:38):
cost of dealing with the Auckland Council added layers of
cost to the whole project. So it's a very expensive cost.
So you have to have a return on your investment.
So one COSTO at that time was sort of a
test to see how it all worked out. The last thing.
The other thing about New Zealand is you're an island
or two islands, and getting inventory from northm Record, from

(02:00):
Asia and from the Australian market took a lot of coordination,
so that that also presents some issues as well being
in stock all the time.

Speaker 2 (02:07):
Do you think that it's the game change of Costco,
is the game changer that the country is looking for?

Speaker 1 (02:13):
Oh? I think so. I think. I think Costco just
from the merchandising perspective and now that they're working out
their kinks we had initially, I think Costco can bring
a lot of value to the market for the New
Zealand consumers. Absolutely, we're proving that already and in fact
that hasn't changed since day we open.

Speaker 2 (02:30):
Patrick. Thank you for your time. Patrick Noon, former Costco
Managing Director of New Zealand.

Speaker 1 (02:34):
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Speaker 2 (02:38):
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