Costco to spend further $140m in Australian expansion

Costco Wholesale, a US-based warehouse club chain and discount supermarket group, has committed a further $140m to grow its operations in Australia.

The latest move of the chain places further competitive pressure on Australian retailers such as Coles and Woolworths.

In 2011, the firm has sent across $90m in equity funding to its Australian arm for its continued start-up costs, which include the purchase of land and buildings. In addition, the firm has sent a second capital contribution of $10m.

Brisbane Times quoted Costco Wholesale Australia managing director Patrick Noone as saying that most of the funds would be used to open two or three new warehouse supermarkets.

''We would like to do two [stores] in calendar 2013, ideally; we could do three but are likely to do two for sure.

"We have a couple of sites we are working on - one in Sydney [and] we do like the market in Queensland and would like to have a site up there in Brisbane next year,'' Noone said.

Costco Australia operates three warehouse stores in the country. The stores are located in Melbourne's Docklands, Sydney's Auburn and one near Canberra Airport at Majura Park.

Noone said the company is also looking at a second store in Melbourne and Adelaide is also an interesting area for the firm.

Costco Wholesale specializes in household goods and food in bulk and whitegoods, furniture, alcohol and luxury items such as diamonds and jewelery.