Costco is building its first Australian warehouse in Sydney

Photo: Getty Images.

Costco, the retail giant making inroads into the market share of Coles and Woolworths, is building its first Australian warehouse distribution headquarters in Western Sydney at a cost of $77 million.

The facility at Kemps Creek, near the site of the future Western Sydney Airport, will include a 33,588 square metre warehouse and create up to 1000 jobs.

NSW Premier Gladys Berejiklian says the 14ha facility is expected to create 730 construction jobs and 210 operational jobs.

“The location of these jobs is also strategically important for our State, with Costco’s new facility only a stone’s throw away from the future Western Sydney Airport site in Badgerys Creek,” she says.

“Costco is the latest major employer to be setting up shop near the future airport site, helping form what will be an Aerotropolis – a fully integrated economic precinct that will deliver jobs and opportunities for the people of Western Sydney and across NSW.”

The US-based chain sells memberships for $60 per year and members can then buy the company’s low-price products in a wholesale format.

Industry analysts IBISWorld say: “Despite operating in Australia for less than a decade, Costco is already making its presence known across retailing and wholesaling industries.”

Costco entered the Australian market in 2009 with a single store in Melbourne and with prices on average 20% cheaper than the major players. It and discount supermarket chain Aldi have been taking market share from local players.

Aldi, which plans to open another 30 stores around the country in the next 12 months, has a market share of about 13.2%.