Opening of Costco France- A unique concept for France

The US group, number two worldwide in mass wholesale, opened its first megastore in France on Thursday 22nd June 2017. This first French site, situated in the town of Villebon-sur-Yvette (about 15 miles south of central Paris) covers approximately 13,500 m2 and features 3,800 stock keeping units. For the opening of the store around 200 employees were recruited, a number that is only set to increase as time goes on.

This style of store is not what the French consumers are used to. It is said that it can almost be viewed as a revolution, as Costco’s methods- little range in product, almost no service and much lower prices- are rarely practised in France. Therefore, it is foreseeable that the US group will face intense competition on the French market with other retailers such as Carrefour, Auchan or wholesaler METRO.

However, the US group already has several strategies in place to entice the French consumers into their store. To start with, the membership subscription fee isn’t as high compared to other countries. In the US, a yearly membership fee costs $55, whereas the fee has been set at only €36 (equivalent to approximately $40). This has clearly been a success, as the French site was said to open with 30,000 members. Additionally, another strategy is to follow the brands strategy of selling luxe items at a reduced price. With this, Costco France will no doubt win over clients in no time. After all, who can refuse, when grand cru wines like Château Margaux are being sold at 300 euros less than the usual price?

Looking towards the future, Costco management has indicated that they plan to continue to expand their stores across France with the aim of opening another 15 units in the country by 2025. This will likely have a significant impact on the landscape of the French market and it will be interesting to see what new developments emerge from it. But the key question remains, will this new style of retail win over the French consumers?