Costco versus Coles in Australia

Out of the blue, on Sunday Mrs Bob said to me “I want to go to Costco.

Gosh, I’d forgotten all about those people; when we used to live in the UK our Costco trips were a regular occurrence. Once every two or three months we would drive over to Gray’s Thurrock, a half-hour or so drive for us, and load up the Volvo.

Now we have a Costco here in Queensland…

Costco QueenslandIt’s been there since May last year and is one of seven that Costco have opened so far around Australia. More are being planned as well apparently. So, is the Australian Costco worth the same regular visits we gave to the UK warehouse?

To find out, we had to join first, which cost us $55. That gave both my wife and I a membership card and we could invite two friends each apparently. A quick look at the Costco UK website and it seems they have various membership plans ranging from £20 up to £55 plus VAT per year. So I think the Australian membership fee compares favourably.

Let’s get shopping

I’d remembered from the UK days that shopping in Costco is a bit of an art. You need to be careful what you bulk buy, you don’t want to be loading up with stuff that has a limited shelf life or anything that you might eventually get bored with or go off completely.

Toilet rolls, kitchen rolls, washing powder, dog food, beer and chocolate were favourites for us back in England, let’s see what we get here in Australia.

It’s a pretty big store…

Inside CostcoYou can also grab something to eat, apparently Costco have been selling their hotdog and drink deal at the same price, $1.50, in the US since 1985. Here you can grab your hot dog and refillable drink for just $1.99…

Costco foodAfter about an hour or so we emerged from the other end with a trolley full of stuff…

Costco Shopping… and $453.28 poorer. But did we save money?

Costco versus Coles, the result

In total we purchased 27 items, but I’m just going to select 10 of those, picking only on items that are available in Coles as well, either as the exact same brand or at least a completely comparable product.

Also bear in mind that you are often buying in bulk in Costco, so for example, the toilet rolls below, we purchased a pack of 48 in Costco, they come in packs of eight in Coles. So for comparison purposes, I multiplied the Coles price by six. I have made similar adjustments for other products.

Costco and Coles, price comparison:

costco costsWow! Those prices speak for themselves, don’t they?

Australian Costco is definitely worth a regular visit, we will certainly be going back. The Coles/Woolworths duopoly has a serious challenger.

You may have noticed I didn’t purchase any beer, that’s because Costco in Queensland doesn’t have a liquor license. We have some strange licensing laws in this state which don’t apply in other states, so whilst you can buy your tinnies in New South Wales, for example, you’re out of luck here.

Unlucky for Queensland, I say. Just like in the UK though, I did grab some cheap petrol as we left the warehouse.

And we still had time to get to the beach, not Deception Bay which is just down the road from Costco…

Deception Bay

Deception Bay 2But in Redcliffe which is a little further down the road.

Redcliffe  Beach

Redcliffe Beach  2

Redcliffe PierWe rounded off our day with fish and chips in the evening at the rather tasty Morgan’s…

Morgans

Fish n chipsAll in, not a bad shopping trip at all.

When we arrived home we needed to unpack and store all our purchases. I decided to put the large pack of toilet rolls on the bottom shelf of a unit in our ensuite. But something else was already stored there, something I’d completely forgotten all about.

A big box of envelopes, unused envelopes. I’d bought them from Costco in the UK about nine years ago. A timely reminder to be careful what you bulk buy.

Anybody need an envelope?

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{ 18 comments… add one }
  • Jeffas September 10, 2015, 2:01 am | Link

    We live at a delightful small town called Lara, 60Km SW of Melbourne. Recently an enormous Coles supermarket complex has opened here with a wide range of products. A super spacious shopping environment. Toilets and adjacent cafe. Free parking. – To which Woolworths/Safeway have started an even larger complex with underground carpark [be useful in hot weather]. The nearest Costco is away at Melbourne and we do not like the idea of bulk purchases in a warehouse. – But there is an Aldi just 8 Km away, and it is refreshingly different, marginally cheaper, but leave us deprived of brand identity as Aldi stock “fake” brands, e.g. “Bramwells Peanut Butter” when “Bramwells” does not exist as such, and is found in small print to be a trademark of Aldi Stores. And by the way the product is imported from China! Brands are important! – We are interested in moving back to the UK, and taking a trip there next June. Used to love Sainsburys. But on balance, with your purchases bagged at the check out, with Aussie courtesy and good humour, the Australian supermarket has a slight lead.

    • BobinOz September 10, 2015, 3:37 pm | Link

      Well, you sound as though you are well covered for supermarkets 🙂

  • Praveen JH May 21, 2015, 10:58 pm | Link

    Hi Bob,

    A delight to visit your awesome site again to comment!

    Happy to announce I and the wife just returned from our first visit to Oz, and a week-long tour in Adelaide, after being granted Skilled PR Visa 190 SC to South Australia a year back. We checked out some nice places to stay, drove around to get a feel of the town and had a good time. Lovely! We are now back in our home country, and returning to Adelaide with the kids to move in for the long term, next month.

    Being a job seeking couple with two school age kids, staying in a rented place, we understand we are entitled to a bevy of benefits through Centerlink. We also understand that we have to visit the Medicare people, apply to get a TFN and maybe many other similar important stuff I might have missed to mention here. We are totally new to this; and have had no previous advise whatsoever.

    I’ve been to many government websites, and the info is mind numbingly vast and a bit overwhelming for the uninitiated; that’s us. Entitlements and eligibilities are linked to each other in many complex ways. It would be wise to get a better insight on all of this. We need to understand our new Australian situation financially, where we would like to head to, and further, how to correctly interpret and get entitled to the various government payments available. As they say, well begun is half done.

    My questions are:
    1) Can we just depend on the Centerlink guys to patiently show us the nuts and bolts of the whole setup and let it at that?
    2) Are there some freelance experts out there who can read into our situation and advise which doors to knock, what all entitlements apply to us, and the next steps?
    3) Have there ever been discussions on these matters on any Bobinoz forums? If there was, please point me there (and please move this comment of mine there)
    4) And last but not the least, what is your take on the whole shebang?

    Thank you.
    Praveen.

    • BobinOz May 22, 2015, 9:09 pm | Link

      I have written about this before, you can see it here…

      http://www.bobinoz.com/blog/9787/centrelink-social-security-in-australia/

      And I don’t really have a take on the whole shebang, other than depending on the type of visa you’ve got, (I have no idea about the terms and conditions of a 190, I’m not a MARA agent) you may not be entitled to very much at all.

      The whole point of allowing people from other countries to migrate to Australia is so that they can bring with them their skills, get gainful employment and contribute to this country by paying tax.

      That said, if you are entitled to anything, you can trust Centrelink to talk you through it patiently, but I wouldn’t have a clue what you might or might not be entitled to, as you say, it’s very complicated.

  • Cactus Jack March 23, 2015, 9:17 pm | Link

    Bob,

    I have to say first off, your site is fantastic, and candidly, was a strong influencer in my decision to move down under. I have learned so much from it, and can never really say thank you fully for it.

    With this said, here comes the big but…. portion. 🙂

    While you have written a very accurate description of life in Australia, with solid comparisons to the UK, you have one major blind spot(my opinion only)…on what are reasonable prices for goods in Australia. I have read your hard yakka analysis, and while it may be accurate for the UK vs AU pricing, its way off for pricing in Canada, the US, and many other western countries. Also, you use electronics goods like iPads in some of your hard yakka comparisons. Electronics are higher priced here, but are probably some of the least overcharged for items.

    Try housing in Sydney, Perth, or Melbourne, and household items, plus groceries, as this is where i see some of the worst pricing. Australia is entirely self sufficient in food, as an example. How can we justify paying 3x more for bananas that are grown here in Australia??

    Since Costco carries many of the same items, from the same vendors, in multiple countries, you can see the ripoff factor more clearly when comparing to Coles or Woolies.

    Yes, I do have a bit of a bee in my bonnet over this, since as far as I can see…it really is due to price gouging by duopolies.

    When I said Australian consumers are having half their disposable income taken, I should have said they could make their money go twice as far if retailers were charging just 25% over what they charge in other markets like Canada or the States. I base this on what I see in analysis from the ABS (link below) that the average family spends about 1900 weekly, with over half being discretionary,and the bulk being food or household related. This is just where people are paying far too much compared to many (not all obviously) other western countries. Costco comparisons just illustrate the ripoff very clearly.

    http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4102.0Main+Features30July+2013#couples%20with%205-14

    I humbly restate that my opinion is people are getting royally screwed from lack of competition here. To be fair, this is in comparison with N. American based pricing for the most part.

    Yes, Aussie salaries may average 30% higher, but if you are paying 70% more on average for the same lifestyle, how can you say that is remotely even?? Again, this is really for Canada or US pricing awareness, as thats where my sticker shock in comparison is derived from mainly.

    Australia is wonderful in so many ways, but the price gouging vs. what is reasonable in large parts of the globe elsewhere is quite shocking to me. A friend of mine from London called it the “sunshine” tax. He may have a good point there, but I dont think we ought to believe Australian household goods prices are anywhere near as competitive as they should be.

    • BobinOz March 24, 2015, 5:13 pm | Link

      Glad to hear you think my site is fantastic, that’s always good. Now down to the nitty-gritty.

      When it comes to Canada, I’m clueless, I have no idea. This website was primarily to do with comparing UK and Australia pricing, well not just pricing, comparing everything between two countries. After all, I came here after living for many many years in the UK so I was in a good position to make that comparison.

      As it grew, I did need to go a bit more ‘global’ so I did my best to include the USA where possible, but that’s entirely based on research rather than experience. So anything you say about Canada I have to take at your word, I simply don’t know.

      If I have a blind spot, that’s it, Canada along with another 196 countries around the globe I haven’t lived in:-)

      In my view, it is also unrealistic to expect a country like Australia to be as competitive in terms of suppliers as a country like the USA; 22 million people versus 350 million people, not going to happen. But when it comes to comparisons with the UK, 22 million people versus 65 million people, I think Australia compares extremely well.

      Every grocery basket I’ve compared has been a very close comparison indeed, not even worth worrying about. When you take into account the higher wages here, is possible Australia is actually cheaper. Each year everything here seems to get cheaper. Bananas is a bad pick on your behalf, we’ve just come off of the back of a couple of banana bashing cyclones and we also are now a nation in the grip of the world’s worst banana disease, it’s very possible that bananas could be wiped off of the map in Australia completely.

      It’s not the time to be buying cheap bananas.

      Anyway, I’ve never compared a shopping basket between Australia and the US or Canada, so you may have a point on that one, I simply don’t know. As I’ve said, I think it’s difficult to compare our two countries given the massive differences in populations, but I am very comfortable with my comparisons to the UK and I certainly do not have a blind spot on it.

      It’s a similar problem with housing, I’ve spoken a lot about housing on this site and although on the face of it houses here in Australia can look more expensive than they are in England, in England they are like rabbit boxes sitting on, literally in some cases, 70 to 90 m² of land.

      http://www.bobinoz.com/blog/7693/house-prices-in-australia-losing-the-plot/

      I simply couldn’t afford the size of house I’m living here in Brisbane if I was still back in the UK, yet I paid two thirds of what I sold my old house for, so I don’t even buy into the dear house is debate.

      Sydney and possibly Melbourne are the exception, Perth did go through a mining boom, but I think that’s over now. Even so, some of these houses in these cities are still quite massive compared with UK homes and if you compare them with large houses in major cities in the UK, like London and Bristol, well they have plenty of million pound plus houses themselves.

      There you go, we’ve both had a good rant, I’m prepared to accept that you may have a point about Canada and the US, hopefully you can accept that I am NOT in a blind spot when it comes to the UK.

  • Cactus Jack March 23, 2015, 11:56 am | Link

    I agree that things are improving, but only due to overseas online competition, or from foreign chains like Costco and Aldi. People always talk about wages being higher in AU, but its less than 20 percent of the total cost for most goods now. Thats the 20 percent higher cost I was mentioning that is reasonable.

    Ultimately, it comes down to economic freedom, and not gettimg ripped off by entrenched duopolies. It used to be the nature of the beast, and needed to be accepted as AU was so far from where everything was made, ie Europe, or America. Those days are over, and its now cheaper to ship to AU from China than anywhere else.

    Aussies need to get smart, and realise they are having over half their disposable incomes stolen from them due to this. Reflect on that next time you are budgeting for that holiday or boat purchase, etc…

    • BobinOz March 23, 2015, 6:12 pm | Link

      Ah, you seem to have a bee in your bonnet Mr Cactus and your comment “they are having over half their disposable incomes stolen from them” is, in my opinion, overly dramatic and totally misleading.

      I have a whole category on the cost of living in Australia and I regularly compare prices between Australia, the UK and sometimes the US. When I say things are improving, they have improved massively over the last seven years to the extent where often things are cheaper here now that they are elsewhere.

      And people here do talk about wages being higher because they are, over 30% higher according to my comparisons with the UK. So of course it needs to be taken into account. But things have improved so much that many of our goods are the same prices as elsewhere and the higher income is the added bonus.

      It’s swings and roundabouts, of course, some things are dearer here in Australia but do remember that there are many things that are more expensive in the UK, important things as well, like petrol, for example.

      To suggest that Australians are having half of their disposable incomes stolen from them is absolute piffle.

  • Cactus Jack March 19, 2015, 6:45 am | Link

    Costco uses it’s USA and Aussie suppliers, so it has strong pricing power in the market.

    Generally, I find Costco to be about 20% higher pricewise in Au than in USA, for the same items. This is what you should be paying for these goods. ASDA may be as high as Coles or Wollies but that just means you were paying too high a markup there. US prices are the true cost of a good to be delivered to the market, with a reasonable profit. Anything more is a lack of competition, or excessive taxation. The food and accumulated supply chain taxes are similar in AU as US, so it’s pure anti competitive actions by the grocery duopoly. Australia is loaded with duopolies like this, and it’s the main reason things are double or triple prices elsewhere in many industries.

    • BobinOz March 19, 2015, 9:12 pm | Link

      A lack of competition is certainly part of the problem, but I think it’s also to do with wages being higher here in Australia and associated costs as well. There is also a bit of ‘what the market will bear’.

      I think things are slowly improving in Australia, let’s hope it continues.

  • djmcbell March 18, 2015, 5:59 pm | Link

    Interestingly, my wife did a comparison online shop a week or so ago, checking our usual shop at Asda compared to one in Australia (I forget which one it was, but it was one of the main ones – Woolworths or Coles). Overall the price came out about the same (if you remember that £1 = roughly $1.90).

  • Cactus Jack March 18, 2015, 5:42 pm | Link

    The lack of real competition in Australia still drives me crazy. In your own sample, we are paying twice as much for the same goods.Not 10%, not 25%…double!!!

    It’s absurd, and is obviously collusive and duopolistic behavior. The more time I live here, the more I see the lack of any real competition is what holds Australia back in oh so many ways…

    • BobinOz March 19, 2015, 9:06 pm | Link

      I know, it’s insane is in it, Coles and Woolworths must be making an absolute fortune. Fortunately companies like Costco and Aldi are making a dent in it, and I advise people to head for those stores to save money, it’s worth the trip.

  • Jackoflet March 18, 2015, 4:28 am | Link

    I see you bought some cat food? What’s his/her name? 😀

    Do you have any other pets? I know you had a dog.

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