Costco, US’ fifth biggest, eyeing India?

costco_logoCostco (Costco Wholesale Corporation), the fifth biggest retailer of the U.S., which was founded in 1983 in Seattle (Washington), and which operates membership warehouse club format, modelled on Wal-Mart’s Sam’s Club and Metro’s Cash & Carry, may soon follow Wal-Mart, its legendary competitor, by foraying into India, according to an Economic Times report.

The US-based, over $60 billion, Costco, which employes over 1,25,000 persons, operates 502 wholesale retail stores across the world. 370 of these store are located in the US and Puerto Rico, while the balance 132 stores are located in six other countries of the world.

Metro Cash & Carry and South African Shoprite are the only two wholesale retailers currently operating in India, although Wal-Mart, Reliance and Pantaloon are also gearing up to roll out this format across the country.

While, current policy guidelines, unlike Wal-Mart, does not bar Costco to enter the country without a local retail partner, Costco may be looking for a partner like Bharti, who may help accelarate its entry into the fastest growing and the second most populous retail market of the world.

At Costco, which sells national and regional brands at prices below traditional wholesale or retail outlets, on a membership model with monthly billings, no branded item can be marked up by more than 14 percent, and no private-label item by more than 15 percent, whereas, supermarkets in the U.S. by contrast in general mark up merchandise by 25 percent, and department stores by 50 percent or more.

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