The first membership club warehouse outlet in Ireland would allow traders and certain categories of working people to buy discounted bulk goods and was not a supermarket, a spokesman for Costco, a US-based retail group told an An Bord Pleanala hearing yesterday. The decision to grant planning permission for the £12 million scheme at Fonthill Industrial Park, in west Dublin, by South Dublin County Council has been appealed by RGDATA, the independent retailer group, which contends that Costco is developing a supermarket in an industrially zoned area. Costco UK seeks to develop a 126,000 sq foot facility, with a 778-space car park, which would initially employ 150 people, rising to 250 people over time. Mr Robert Matthews, a planner with South Dublin County Council, told the hearing the cash and carry operators would be most affected by the Costco operation. Costco's retail impact assessment concluded that the facility would draw 3.5 per cent of the wholesale trade expenditure from within a 30-minute catchment area.
Mr Nick Deeks, Costco's property director in Ireland, said the company targeted low credit risk people for the 35 per cent of its members who were non-traders. Members pay an annual subscription of about £20 and gain entry to the premises with an electronic swipe card.
Mr Deeks said that the company strategy was not an attempt to look for an elitist group of consumers but to acquire members with a good credit rating. He said the company had a margin of between one and two per cent which was not enough for an advertising budget. Its reputation among non-traders, who would contribute about £19 million annually to sales, was made by word of mouth.
Asked by Mr Dermot Flanagan BL, for RGDATA, if the unemployed would be excluded from joining Mr Deeks said that he thought they would. But he added that someone on a low income would not find it attractive to purchase goods in bulk form. Mr Stephen Dowds, a senior inspector with An Bord Pleanala, heard that the facility would also include an opthalmic section, a cafe, and a film developing counter. Mr Dermot Flanagan BL, for RTDATA, noted that the "food aspect" of the building amounted to a third of the floor space. "When you consider the definition of a supermarket being a large self-service shop selling household goods and articles, in that context we consider that this has significant implications on the nature of the supermarket," he said.
Mr Bernard McHugh BL, representing Costco, said that by any reasonable definition the proposed facility was not a shop where the majority of activity involved visiting members of the public. It was a sui generis development, standing within its own class as a membership club. Costco Companies Inc, which established itself in Britain seven years ago, had a turnover of $16.56 billion for the 36 weeks to October 5th, 1998, an 11 per cent increase on the previous period. After-tax profits for the period increased by 58 per cent to $309.1 million. A decision will be made by An Bord Pleanala before October 6th.
