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Costco Undercuts Harvey Norman By Hundreds On CE

US retail giant Costco is expanding in Australia, while undercutting other retailers such as Harvey Norman on consumer tech – sometimes by hundreds of dollars.

A wide range of products advertised on Costco’s website are available for lower prices than at competing retailers. An 82” Samsung 4K TV, for example, is selling for $3270 at Costco, compared to $3495 at Harvey Norman – a discount of $225.

The discounts extend to more than just TVs. The 256GB Samsung Galaxy Note20 Ultra 5G smartphone is selling at Costco for $1900, compared to $2000 at Harvey Norman. A Nikon D5600 DSLR camera sells for $1145 at Costco with two lenses, compared to $1398 at Harvey Norman; and even Apple is getting in on the deals, with the new AirPods Max selling for almost $100 cheaper at Costco – $800, compared to $899 at Harvey Norman.

Costco is growing in Australia – since opening its first warehouse store in Melbourne’s Docklands in 2009, it has expanded to 12 outlets around the country: three in NSW; four in Victoria; two in Queensland; and one each in the ACT, South Australia, and Western Australia. The WA store at Perth Airport is its most recent, opening in March this year amid the COVID-19 pandemic.

Image: Costco

The chain runs on a membership model, where consumers can sign up to $60 per year “gold star cards”; business customers can buy memberships for $55 per year. According to a 2016 report in Forbes, membership fees account for 80 per cent of Costco’s gross margin and 70 per cent of its operating income.

Memberships are valid at any Costco store around the world, and Costco members can also claim one free card for members of their household. While members can bring up to two guests with them when visiting stores, only cardholders are allowed to make purchases.

ChannelNews has contacted Costco for comment.

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