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New Zealand is getting our first store in a couple of months and people are obsessed with it. Stories in the media nearly every week. Long queues for membership

by slyall 4y ago

New Zealand is getting our first store in a couple of months and people are obsessed with it. Stories in the media nearly every week. Long queues for membership. A lot of this is because the local Supermarket Duopoly avoids competing on price and makes great profits. People are looking forward to cutting their costs and also a flow-on as the supermarkets cut their prices a little to compete. Similar to IKEA which is a year or so away. Easy to take for granted when you have it but the alternative is paying a lot more for similar to worse quality.

divbzero 4y ago
It would be fascinating to be part of that team at Costco or IKEA planning to open a new store in a new country. On top of the challenges you can think of, there must be aspects of running the business that you take for granted in your home country and don’t realize will be a challenge in the new country.
- barry-cotter 4y ago
  > On top of the challenges you can think of, there must be aspects of running the business that you take for granted in your home country and don’t realize will be a challenge in the new country. New Zealand has an educated, English speaking workforce, uses the English common law and actually has rule of law. They know how to do this. IKEA has stores in Vietnam, where all of those are much less true. They’re not going to learn much about international expansion they don’t know already. This is very different from a Canadian company opening up in the US, or a French one in Belgium. IKEA, and I presume Costco know how to do this already.
- pionar 4y ago
  You hire people from the new market who do know those quirks. Or, you can be like McDonald's and most fast food/QSR companies, and simply license your name to "master franchisees" in those markets.
- DocTomoe 4y ago
  If you want to read an example of people failing at that task, read up on Walmart trying to conquer Germany. [1] [1] many, many articles, but https://www.theguardian.com/business/2006/jul/28/retail.money https://www.theguardian.com/business/2006/jul/28/retail.mone... is as good as any
surfmike 4y ago
Costco entering Iceland also had a measurable effect on the country’s inflation rate. https://www.icelandreview.com/news/food-prices-drop-thanks-costco-effect/ https://www.icelandreview.com/news/food-prices-drop-thanks-c...
lordgrenville 4y ago
I would guess that island conditions naturally lead to (at least tacit) price collusion, such that the entry of a multinational might not lead to prices going down. (In the US, the classic case is White vs. Packer, about gas prices in Martha's Vineyard.) IKEA prices vary a lot between countries. https://www.stuff.co.nz/life-style/homed/latest/121925681/not-always-cheap-ikea-home-office-cost-varies-hugely-between-countries https://www.stuff.co.nz/life-style/homed/latest/121925681/no...
mixmastamyk 4y ago
Where will the stores be located? Auckland or greater Wellington perhaps?
- slyall 4y ago
  Westgate in West Auckland.

by slyall 4y ago

divbzero 4y ago

It would be fascinating to be part of that team at Costco or IKEA planning to open a new store in a new country. On top of the challenges you can think of, there must be aspects of running the business that you take for granted in your home country and don’t realize will be a challenge in the new country.

barry-cotter 4y ago
> On top of the challenges you can think of, there must be aspects of running the business that you take for granted in your home country and don’t realize will be a challenge in the new country. New Zealand has an educated, English speaking workforce, uses the English common law and actually has rule of law. They know how to do this. IKEA has stores in Vietnam, where all of those are much less true. They’re not going to learn much about international expansion they don’t know already. This is very different from a Canadian company opening up in the US, or a French one in Belgium. IKEA, and I presume Costco know how to do this already.
pionar 4y ago
You hire people from the new market who do know those quirks. Or, you can be like McDonald's and most fast food/QSR companies, and simply license your name to "master franchisees" in those markets.
DocTomoe 4y ago
If you want to read an example of people failing at that task, read up on Walmart trying to conquer Germany. [1] [1] many, many articles, but https://www.theguardian.com/business/2006/jul/28/retail.money https://www.theguardian.com/business/2006/jul/28/retail.mone... is as good as any

surfmike 4y ago

Costco entering Iceland also had a measurable effect on the country’s inflation rate. https://www.icelandreview.com/news/food-prices-drop-thanks-costco-effect/ https://www.icelandreview.com/news/food-prices-drop-thanks-c...

lordgrenville 4y ago

I would guess that island conditions naturally lead to (at least tacit) price collusion, such that the entry of a multinational might not lead to prices going down. (In the US, the classic case is White vs. Packer, about gas prices in Martha's Vineyard.) IKEA prices vary a lot between countries. https://www.stuff.co.nz/life-style/homed/latest/121925681/not-always-cheap-ikea-home-office-cost-varies-hugely-between-countries https://www.stuff.co.nz/life-style/homed/latest/121925681/no...

mixmastamyk 4y ago

Where will the stores be located? Auckland or greater Wellington perhaps?

slyall 4y ago
Westgate in West Auckland.