iant Costco opened its first store in Spain yesterday, as the company looks to capitalise on the Iberian country's weak economy.Costco, one of the world's leaders in the warehouse-club section, yesterday opened its brand new 145,000-square-foot warehouse in Spain's fourth largest city, Seville.
Along with the new competition, Costco also represents a business model that is new to Spain: the warehouse club, which requires customers to pay an annual fee, in exchange for the promise of lower prices. Under the system, customers buy low-priced products in bulk from a limited range, which Costco chooses based on the supplier’s willingness to offer lower wholesale rates.
A similar wholesale cash-and-carry chain, Makro, has been in Spain for years, but is only open to business customers.
Costco’s annual membership fee is in the range of €25 to €30.
Seville, and soon Madrid, will test Costco’s ability to expand overseas, as it pursues its goal of approaching 1,000 warehouses by the middle of next decade, up from 652 now.
235 people are employed at the Seville store. Costco received nearly 150,000 applications for the positions, as jobseekers in Seville clamoured to be discounted from the city's 34% unemployment rate.
Costco already has warehouses in the UK, Canada, Mexico, Australia, Taiwan, South Korea and Japan, and about 31% of its employees are outside of the US.
