Costco’s New Zealand business has crossed an important threshold, moving into profit for the first time since opening its doors at Westgate in 2022.
The result marks a shift from the heavy investment phase that defined its early years to a more settled, commercially sustainable footing, and it sends a clear signal about the strength of the brand’s local proposition.
The figures released today show the Auckland operation generated a modest but meaningful surplus, underpinned by steady revenue growth and tighter cost absorption. While the profit number itself is not large by global standards, its significance lies in timing and trajectory. Costco has moved from proving demand to demonstrating viability, and it has done so with a single store in a highly competitive grocery and general merchandise market.
From the outset, the New Zealand entry was capital intensive. Start up costs, staffing, logistics, and the realities of importing a global operating model into a relatively small and distant market weighed heavily on early performance. Losses in the first two years were always part of the plan. What matters now is that sales volume and membership scale have reached a point where those fixed costs are no longer a drag on the balance sheet.
For the wider grocery and FMCG sector, this result reinforces the disruptive role Costco continues to play. Its membership model, limited range discipline and aggressive value positioning have reshaped price perception in several categories. The move into profit suggests those pressures are not temporary. They are structural.
It also strengthens the case for further expansion. A profitable base gives Costco greater flexibility to invest in additional sites, distribution capability and local supplier relationships. For suppliers, the message is mixed. Costco remains a demanding customer, but one that now looks firmly embedded in the New Zealand retail landscape rather than an offshore experiment.
More broadly, the result arrives at a time when many retailers are still navigating subdued consumer confidence, rising costs and cautious spending. That Costco has managed to tip into profit under these conditions will not go unnoticed by competitors or landlords.
This is not a story about a single good year. It is about a business model that has now proven it can work here. The real impact will be felt in what comes next.
More here.
