Costco’s largest fuel station set for Melbourne’s west as retailer begins construction in Ardeer

Discount retail giant Costco has broken first soil at the site of its 15,000sqm Ardeer warehouse, set to become home to its largest fuel station in Australia when doors open later this year. 

The membership-only retailer is ramping up its Australian expansion as the cost-of-living crisis forces households to seek out value, but sourcing appropriate properties remains a key hurdle.

“Real estate is the toughest challenge, so we have feelers out in every area all the time,” Costco Australia managing director Chris Tingman told realcommercial.com.au during an interview on the construction site of its newest store in Melbourne’s west. 

“We try and make sure we have everything that we’re known for to service the members best, so we need to have the right real estate space.” 

The first sod was turned at Costco’s newest warehouse in Melbourne’s Ardeer on Friday, which is set to replace its Docklands store from late 2024.

Construction has begun on Costco’s future Ardeer warehouse. Picture: Costco

Located 15km west of the Melbourne CBD, the 5.9 hectare site in an industrial precinct on Ballarat Road is set to be a larger offering compared the retail giant’s current Docklands operation.

Mr Tingman said the new site was ideal because it provides members with increased parking and its largest fuel station in Australia – offering 32 bowsers with two high-flow diesel pumps. 

“Costco sees this region as dynamic and fast-growing and we believe that we can bring great value in relation to a wide range of products and services to the community,” Mr Tingman said.

“It’s all about the best price, so it goes back to the value and quality that we want to give our members,” he said.

The 15,000sqm warehouse will offer an extended range of merchandise, he said, along with increased parking of up to 760 spaces.  

Costco’s ‘patient’ expansion

Costco has 14 other warehouse stores across Australia and more than 800 locations globally.  

But despite its rapid growth, Mr Tingman said Costco was a patient business when it came to its expansion plans.  

“We’ve continued to open about 20 to 25 stores [globally] every year – that’s been our track record almost since the inception of the company,” he said.

Costco’s new Ardeer warehouse is expected to open its door by the end of the year. Picture: Costco

“We have to find the balance between the growth of potential stores and other factors with making sure our teams are ready because we promote from within.  

“We’re very patient and we make sure we have the right people ready.”  

Expanded offering

The new Ardeer location will feature a variety of specialty services including an optical department and hearing aid centre, tyre centre, and the company’s famous food court.  

Offering its usual range of groceries, confectionary, alcohol, appliances, automotive supplies and toys, the warehouse will also stock hardware, sporting goods, jewellery, electronics, books, housewares, apparel, health and beauty aids, furniture and office supplies. 

Costco will be relocating about 270 employees from the Docklands warehouse to Ardeer, while creating an estimated 120 jobs during construction phase. 

PropTrack senior economist Anne Flaherty said the Ardeer region had been growing very rapidly, experiencing 12% population growth over the past five years, with more available and affordable space out west.

Costco’s Docklands warehouse will close its doors once the new Ardeer store is ready to open. Picture: Getty

The new Ardeer warehouse comes after Costco opened its 15th store in Coomera on the Gold Coast in June 2023. 

Prior to that, the company had launched its 14th Australian store and second warehouse in Perth in December 2022.  

Costco has previously flagged it’s looking for sites for new warehouses in Hobart, North Sydney, South Sydney, North Perth, South Adelaide and Geelong. 

Annual Costco memberships are $65 for businesses and individuals, and $130 for executive memberships, which give customers access to purchase thousands of brand-name products in bulk.