Costco to sell Petrol @99cl in Brisbane Sydney ?????

[csv8]

RETAIL giant Costco is set to spark a petrol price war as it forges ahead with a plan to roll out its own discount fuel outlets.

Queenslanders could be the first to queue for cut-price fuel sold by the US retailer, with the Newman Government about to decide whether the state's first Costco outlet will be given the green light.

An approval would help pave the way for other proposed Costco outlets to offer discount fuel to motorists who pay their $60 store membership.

It would also challenge the grip by Woolworths and Coles on petrol sales by potentially undercutting contentious shopper docket discount petrol schemes.

Costco would need to sell petrol at least 5c a litre cheaper than its competitors to attract motorists and RACQ manager of public policy Michael Roth predicted the chain could initially offer unleaded fuel for as low as 99c a litre to lure shoppers to the store.




Costco has run similar customer engagement schemes overseas.

Chris Kable, of FUELtrac, which monitors prices around the country, said the plan would ramp up the already fierce supermarket price wars, with motorists to win in the short-term.

"Coles and Woolworths won't want Costco to get a foothold in Australia without a fight," Mr Kable said.

"There will be more competition and that generally squeezes prices. What you would probably see is more of the 8c-a-litre discounts than you saw before."

Costco plans to roll out its first petrol outlet at either North Lakes, north of Brisbane, or Sydney, depending on which gains planning approval first.

The chain's general manager for Australia, Patrick Noone, said much hinged on the North Lakes store getting planning approval.

"If we can get this one through to planning then we will start looking seriously at other sites," he said. "We would be in direct competition with everybody else in the retail petrol market."

Costco aims to use its market power as the world's seventh-biggest retailer to find a supplier and sell fuel under its own banner rather than teaming up with an existing petrol company, as both Coles and Woolworths have done.

Deputy Premier Jeff Seeney, who will decide on the North Lakes proposal by February, said the more competition in the Queensland petrol market, the better.

The Newman Government called in Costco's plans this month in a bid to fast-track the store after a court appeal threatened to stall the project.

RACQ's Mr Roth has now called on other retailers, such as Aldi, to follow Costco's lead by entering the petrol market.

Costco's petrol business in the US grew 20 per cent this year after selling more than $US10 billion ($9.64 billion) of petrol in its 360 fuel outlets.

But FUELtrac believes Costco's local plans would have more impact on lowering fuel prices if it found a partner.

Costco's petrol plans come as the Australian Competition and Consumer Commission investigates whether retail petrol docket discounts disadvantage consumers in the long term by chasing out the competition and driving up prices for motorists who do not use shopper dockets.

While fuel prices are expected to dip in coming weeks, unleaded has soared from about $1 a litre seven years ago to more than $1.50 a litre this year.
http://www.couriermail.com.au/news/q...-1226545095824
kelmeny.fraser@news.com.au

My Comment BRING IT ON !!!

[XBROO]

WOW this will stir the price war up, but will it be good for the long term?

[blackf6]

Can't see how it will be viable for Costco long term as. 1 they will either have to buy the fuel from an Australian refinery and loose money by selling it cheaper than it cost to obtain. Or they will have to bring it in by ship to an existing terminal. 2 they then need it to be transported by road to the service stations. Which mean's either paying a 3rd party contractor to deliver their fuel or purchasing their own fleet of tankers.

[Stefan]

Originally Posted by teak81

Can't see how it will be viable for Costco long term as. 1 they will either have to buy the fuel from an Australian refinery and loose money by selling it cheaper than it cost to obtain. Or they will have to bring it in by ship to an existing terminal. 2 they then need it to be transported by road to the service stations. Which mean's either paying a 3rd party contractor to deliver their fuel or purchasing their own fleet of tankers.

Well theoretically they only need to sell it at a loss for a short period, if a substantial number of motorists only buy from Costco the other service stations have to price match to stay in the market. Refineries then need to drop prices eventually or risk loosing business. It would take DEEP pockets from a corporation to enable such a change.

Good luck to them.

[SM1DY]

I hope they stick it to Caltex-Woolworths, their prices are ridiculous. I don't know about the rest of the country, but on the Gold Coast they are typically 6-8c more expensive than BP or 7-11, and up to 10c more than some smaller chains like Matilda and Neumann.

[jpd80]

Sure, why not let Costco sell fuel for 30-40 cents a litre less than other outlets.
It's not as though there are anymore independent operators left to squeeze out of the business...Right?



As in all things, buyer beware, especially if it's linked to rewards cards and shop-a-dockets.

[Full Noise]

Originally Posted by Stefan

Refineries then need to drop prices eventually or risk loosing business.

You can’t be serious, what book of fairytales did you read that from?

Originally Posted by jpd80

Sure, why not let Costco sell fuel for 30-40 cents a litre less than other outlets.
It's not as though there are anymore independent operators left to squeeze out of the business...Right?



As in all things, buyer beware, especially if it's linked to rewards cards and shop-a-dockets.

Damn right, they’d be nearly all gone.

[BHDOGS]

shopper dockets are a joke

[pauljh74]

Originally Posted by BHDOGS

shopper dockets are a joke

If you have one, you get a discount, if you don't, you pay full price. Also, the servos that don't have them, do they charge 4c/litre+ less? No, they price match their competitors.

[Bucknaked]

Originally Posted by BHDOGS

shopper dockets are a joke

I don't understand the shopper docket thing. I shop at Woolies, sometimes at coles. I always get fuel at Caltex, always have. I shop at woolies, they scan my card. I get fuel and i give the card to the operator and I get a few bucks off the fuel. So I'm not sure where the problem lies.

Even if they didn't offer discounts, I would still use Caltex. My preference is for vortex 98 and this what I've always used. If they are going to offer 4cents per litre off the cost of my fuel, who am I to argue. I will alwyas use Caltex regardless of whether theres a discount docket invoved. I never use the discount dockets when filling up my bike. Only the car.

[Full Noise]

Originally Posted by Bucknaked

I don't understand the shopper docket thing.

Me either. I don’t have time to go into a long rant here, but I can assure you, for many people especially in the NORTHERN read Roxburgh Park and Broadmeadows and WESTERN suburbs, Deer Park, sunshine etc of Melbourne, shopper dockets are a matter of LIFE or DEATH.

Translated into English from (not allowed to say language) as it breaks AFFs T&Cs.
I must get my discount and I will do whatever it takes, even if it means blocking a main road with my car while waiting, running over a tanker driver who is delivering to a site or attempting to start a fight with another motorist or tanker driver.

I MUST USE MY SHOPPER DOCKET.

Knuckleheads…

[eb2fairmont]

Good luck to em. Remember that you have to pay 60 bucks, to be able to shop there and at $1.50 litre that adds up to 3/4 tank for most.

It will all be about getting volume into the shop, where there bulk purchases made by costco will offset what they sell the petrol for. 40 cents a litre under going rate for an average fill is 28 bucks, and you would have to spend a substantial amount to get it.

So, do the calcs and if it fits in with what you are doing anyway then good. Any competition that sees woolies and coles duopoly smashed the better. They're a bunch of cost gouging ******.

There's a reasons why all the international companies see Australia ripe for the picking, and that's because the margins compared to what they're used to are good, and that existing retailers here are inefficient and inflexible.

Good times ahead.Me I just buy from BP, had enough of these ******** dockets after working at coles express for 6 years and listening to the whine, crap and drivel that came from the moronic customers who came in.

[JoeDaleyN98]

I think you would find a multi national corp such as Costco, would not move their business this way if they were going to run at a loss for any period of time. You have to question our current petrol suppliers and retailers who seem to think they are fooling us when petrol prices are 20c more expensive the space of a day.

Petrol prices should only change when they get a new batch of fuel in, as petrol doesn't change price when it is in their undergrounds tanks. But when a service stations fuel prices go up and down day to day like a yo yo, it does beg the question what they are up to.

Good luck to Costco!

[hess]

Originally Posted by JoeDaleyN98

I think you would find a multi national corp such as Costco, would not move their business this way if they were going to run at a loss for any period of time. You have to question our current petrol suppliers and retailers who seem to think they are fooling us when petrol prices are 20c more expensive the space of a day.

Petrol prices should only change when they get a new batch of fuel in, as petrol doesn't change price when it is in their undergrounds tanks. But when a service stations fuel prices go up and down day to day like a yo yo, it does beg the question what they are up to.

Good luck to Costco!

Maybe you should go work in the fuel industrie to get you're facts right bud. Just becuase you dont see the trucks/tankers there refueling the U/G tanks doesnt mean they are not constantly there. I work for a BP distributor and we have one servo that we take 50000 litres or pulp adf and ums three to 4 times a week. So thats 150 000 litres every 2 to 3 days. Just to buy a rigid truck with 20 000 litre tank and pump gear is $400 000. A semi with tank and pumping gear is $750 000. The prices the refineries sell to distributors for is low but add in the road costs and wages, insurance etc etc. it adds up quick. My main servo i deliver to makes about 18c a litre which is stuff all.

[Stefan]

Originally Posted by hess

Maybe you should go work in the fuel industrie to get you're facts right bud. Just becuase you dont see the trucks/tankers there refueling the U/G tanks doesnt mean they are not constantly there. I work for a BP distributor and we have one servo that we take 50000 litres or pulp adf and ums three to 4 times a week. So thats 150 000 litres every 2 to 3 days. Just to buy a rigid truck with 20 000 litre tank and pump gear is $400 000. A semi with tank and pumping gear is $750 000. The prices the refineries sell to distributors for is low but add in the road costs and wages, insurance etc etc. it adds up quick. My main servo i deliver to makes about 18c a litre which is stuff all.

150,000L @ 18c every two or three days!!!

Poor old service station only making $27K every two or three days, plus add "over the counter" sales of drinks etc....gee must be real tough..

[nstg8a]

Originally Posted by Stefan

150,000L @ 18c every two or three days!!!

Poor old service station only making $27K every two or three days, plus add "over the counter" sales of drinks etc....gee must be real tough..

Matilda servos only make 2c a litre on what they sell as independents.

I was talking to the outgoing manager of the local one a few weeks back, and he had had enough of the workshop having to prop up the servo all the time.

[Jason[98.EL]]

Originally Posted by nstg8a

Matilda servos only make 2c a litre on what they sell as independents.

I was talking to the outgoing manager of the local one a few weeks back, and he had had enough of the workshop having to prop up the servo all the time.

my family run a few independent servos here in geelong one branded shell the other ones are branded bp and i think they only make about 3.5c per litre

I think they would love to make 18c per litre and they sell approx 1/2 mill litres of fuel a week (mixed) so approx $17500/week on fuel alone not to mention the other sales like mechanic at one of the servos and internal sales of items over the shelf and the mark up on those is huge compared to the fuel

my guess would be 80-90% of customers would buy a drink and a packet of chips if not the hot food

my 2c worth on this

Jason

[pottery beige]

i heard woolies and coles 95 has mothballs in it to raise octane..

[flappist]

Originally Posted by Stefan

150,000L @ 18c every two or three days!!!

Poor old service station only making $27K every two or three days, plus add "over the counter" sales of drinks etc....gee must be real tough..

Hmm yep...all that goes in your pocket....

Well except for:

Now lets see $27k every 2 or 3 days lets make that $70k a week or $3.5 million a year.

Not bad money.

Oh hang on, probably need a servo to sell it from.
$20k-40k per week lease lets sat $30k, so there is $1.5M gone.
Or could but it freehold at $20M for a cheap one which is 1.6M/yr interest only. A servo that sell $150,000 l per 2-3 days is not a corner store in a small country town.

Now who is going to sell the stuff. Hmm at least 3 staff plus a manager that is $5k a week including super, workers comp and other oncosts, so $250,000.
Oh it is 24hr so 6 shifts as no one works more than 38 hours and penalty rates for weekends, nights and holiday so there is another $1.5M gone.

Down to $500k and we have not taken into account licensing, rates, electricity (this is not a house with cheap power and rates), spillage of both fuel and food, theft, insurance, accountancy, legal.......

Starting to run out of money a bit here.

But lets say the nett profit after it all is $200k or about what a mine worker gets. Well at least you don't have to go into the desert.

But then what happens during bad weather. No one goes out but the costs are the same.
Power outage? No income then.
Road works? Sometimes many months of almost not customers.
New freeway bypassing the site, bank doesn't care.
Petrol shortage, hard to sell what you do not have.

And of course as it is your business and if it goes wrong your house that is lost and life destroyed you are thinking about it 24 house as day 7 days a week, no holidays, no breaks.

There is a reason why most businesses go broke in the first year or so and it is because the average person who just goes to work and takes home a pay packet with all the tax prepaid, gets 4 weeks of paid holiday, super, sickies and workers comp has no idea whatsover of what is involved in running a business. All the see is the gross amount.

[pottery beige]

Originally Posted by flappist

Hmm yep...all that goes in your pocket....

Well except for:

Now lets see $27k every 2 or 3 days lets make that $70k a week or $3.5 million a year.

Not bad money.

Oh hang on, probably need a servo to sell it from.
$20k-40k per week lease lets sat $30k, so there is $1.5M gone.
Or could but it freehold at $20M for a cheap one which is 1.6M/yr interest only. A servo that sell $150,000 l per 2-3 days is not a corner store in a small country town.

Now who is going to sell the stuff. Hmm at least 3 staff plus a manager that is $5k a week including super, workers comp and other oncosts, so $250,000.
Oh it is 24hr so 6 shifts as no one works more than 38 hours and penalty rates for weekends, nights and holiday so there is another $1.5M gone.

Down to $500k and we have not taken into account licensing, rates, electricity (this is not a house with cheap power and rates), spillage of both fuel and food, theft, insurance, accountancy, legal.......

Starting to run out of money a bit here.

But lets say the nett profit after it all is $200k or about what a mine worker gets. Well at least you don't have to go into the desert.

But then what happens during bad weather. No one goes out but the costs are the same.
Power outage? No income then.
Road works? Sometimes many months of almost not customers.
New freeway bypassing the site, bank doesn't care.
Petrol shortage, hard to sell what you do not have.

And of course as it is your business and if it goes wrong your house that is lost and life destroyed you are thinking about it 24 house as day 7 days a week, no holidays, no breaks.

There is a reason why most businesses go broke in the first year or so and it is because the average person who just goes to work and takes home a pay packet with all the tax prepaid, gets 4 weeks of paid holiday, super, sickies and workers comp has no idea whatsover of what is involved in running a business. All the see is the gross amount.

you cant move in radelaide without coming across one of these..

http://www.ontherun.com.au/

petrol is a small part of the business Flap..

[The Monty]

Originally Posted by flappist

Hmm yep...all that goes in your pocket....

Well except for:

Now lets see $27k every 2 or 3 days lets make that $70k a week or $3.5 million a year.

Not bad money.

Oh hang on, probably need a servo to sell it from.
$20k-40k per week lease lets sat $30k, so there is $1.5M gone.
Or could but it freehold at $20M for a cheap one which is 1.6M/yr interest only. A servo that sell $150,000 l per 2-3 days is not a corner store in a small country town.

Now who is going to sell the stuff. Hmm at least 3 staff plus a manager that is $5k a week including super, workers comp and other oncosts, so $250,000.
Oh it is 24hr so 6 shifts as no one works more than 38 hours and penalty rates for weekends, nights and holiday so there is another $1.5M gone.

Down to $500k and we have not taken into account licensing, rates, electricity (this is not a house with cheap power and rates), spillage of both fuel and food, theft, insurance, accountancy, legal.......

Starting to run out of money a bit here.

But lets say the nett profit after it all is $200k or about what a mine worker gets. Well at least you don't have to go into the desert.

But then what happens during bad weather. No one goes out but the costs are the same.
Power outage? No income then.
Road works? Sometimes many months of almost not customers.
New freeway bypassing the site, bank doesn't care.
Petrol shortage, hard to sell what you do not have.

And of course as it is your business and if it goes wrong your house that is lost and life destroyed you are thinking about it 24 house as day 7 days a week, no holidays, no breaks.

There is a reason why most businesses go broke in the first year or so and it is because the average person who just goes to work and takes home a pay packet with all the tax prepaid, gets 4 weeks of paid holiday, super, sickies and workers comp has no idea whatsover of what is involved in running a business. All the see is the gross amount.

Are you telling me they only made 200k profit on petrol for the year, and not one person bought a drink or a choccie bar? Come on Mr. Flap, you know better than that.

It is true though, the overheads must be massive (I say must, as I would have no idea, except what I can imply). It isnt a lot of profit per year considering, but I think that with combined sales of things, the profits would be quite handsome.

[flappist]

Originally Posted by The Monty

Are you telling me they only made 200k profit on petrol for the year, and not one person bought a drink or a choccie bar? Come on Mr. Flap, you know better than that.

It is true though, the overheads must be massive (I say must, as I would have no idea, except what I can imply). It isnt a lot of profit per year considering, but I think that with combined sales of things, the profits would be quite handsome.

The whole thing was a hypothetical model to demonstrate some of the costs involved in running a business.

One simple observation. If petrol stations are such gold mines why are there so many in receivership, administration or just closed.......

An Mitch, each of those "on the runs" are a collection of separate businesses, not just one.

[Stefan]

Originally Posted by flappist

Hmm yep...all that goes in your pocket....

Well except for:

Now lets see $27k every 2 or 3 days lets make that $70k a week or $3.5 million a year.

Not bad money.

Oh hang on, probably need a servo to sell it from.
$20k-40k per week lease lets sat $30k, so there is $1.5M gone.
Or could but it freehold at $20M for a cheap one which is 1.6M/yr interest only. A servo that sell $150,000 l per 2-3 days is not a corner store in a small country town.

Now who is going to sell the stuff. Hmm at least 3 staff plus a manager that is $5k a week including super, workers comp and other oncosts, so $250,000.
Oh it is 24hr so 6 shifts as no one works more than 38 hours and penalty rates for weekends, nights and holiday so there is another $1.5M gone.

Down to $500k and we have not taken into account licensing, rates, electricity (this is not a house with cheap power and rates), spillage of both fuel and food, theft, insurance, accountancy, legal.......

Starting to run out of money a bit here.

But lets say the nett profit after it all is $200k or about what a mine worker gets. Well at least you don't have to go into the desert.

But then what happens during bad weather. No one goes out but the costs are the same.
Power outage? No income then.
Road works? Sometimes many months of almost not customers.
New freeway bypassing the site, bank doesn't care.
Petrol shortage, hard to sell what you do not have.

And of course as it is your business and if it goes wrong your house that is lost and life destroyed you are thinking about it 24 house as day 7 days a week, no holidays, no breaks.

There is a reason why most businesses go broke in the first year or so and it is because the average person who just goes to work and takes home a pay packet with all the tax prepaid, gets 4 weeks of paid holiday, super, sickies and workers comp has no idea whatsover of what is involved in running a business. All the see is the gross amount.

What? It's not all profit?

I thought it was all profit.

Lucky we have you to guide us, I would have never thought you had to pay a lease, wages, insurance, tax, blah, blah, blah, blah...

And guess what, there is the mechanic that is in your building (or you are the mechanic), I sell drinks, chips, ice cream, lollies, news paper, pornos, bread, milk.....

And if you are real smart you manage to build equity in the business and maybe make a nice chunk when you sell the business. I can't sell my $200K per year minejob for a million bucks after five years... nor can I really get 5 mine jobs and just pay a Pakistani student to go mining on my behalf.

Oh and I see sooo many service stations going broke around here so margins must be real tight.

[JoeDaleyN98]

18c a liter is a ****load. It might be the case that SOME servos fill up 3 or 4 times a week, but I use to work next door to two servos, I knew someone
That worked at both and they received one delivery of petrol every week, but their prices went up and down every single day. I understand there is huge costs involved, but there is a line, and our retailers have crossed it!

[hess]

18c isnt much when on on my last delivery of 2000litres of ums they make $680. Not that much considering the cost of running a servo.

[pottery beige]

Originally Posted by hess

18c isnt much when on on my last delivery of 2000litres of ums they make $680. Not that much considering the cost of running a servo.

http://www.youtube.com/watch?v=-_5gWURWnnQ

[Stefan]

Originally Posted by pottery beige

http://www.youtube.com/watch?v=-_5gWURWnnQ

HAHAHA Classic......

[MercurySilver]

yeah the dockets are not my thing either
and usually ive left it in the kitchen

stick 60 bucks in and get $2.40 off

i tell the old girl they arent worth it and she says:
"would you throw that 2 odd bucks in the gutter??"

yeah yeah i get the point

[blackf6]

Originally Posted by MercurySilver

yeah the dockets are not my thing either
and usually ive left it in the kitchen

stick 60 bucks in and get $2.40 off

i tell the old girl they arent worth it and she says:
"would you throw that 2 odd bucks in the gutter??"

yeah yeah i get the point

Well tell her that coles and woolies make you pay more for your everyday grocery items to offset their fuel discount. I don't bother with the dockets either, but my missus uses them, makes her happy.

[data_mine]

Originally Posted by MercurySilver

yeah the dockets are not my thing either
and usually ive left it in the kitchen

stick 60 bucks in and get $2.40 off

i tell the old girl they arent worth it and she says:
"would you throw that 2 odd bucks in the gutter??"

yeah yeah i get the point

Guarantee you you're being ripped off more than that $2.40 at the supermarket.

Coles/Woollies are not giving away discounts here, they're just moving the money around, so it looks like it to the uninformed.

Then there's the "spend $5 in store and get an extra 4c off" in the servo store full of high margin overpriced impulse buys. It's win/win for the supermarkets (you buy more, one to get over the $30/$50 coupon threshold, and again at the servo store, and it's usually going to be high margin goods), and lose/lose for the consumer (lack of competition = high prices).

Having said that, you'd be silly not to use the coupons, otherwise you're being gouged both at the pump (who doesn't think the pump prices are 4c more than they need to be) and at the supermarket.

consumers = screwed in this duopoly.