Costco boss sings praises of Angus beef

Australian Angus beef heading to Costco's first China store due to open in August


Analysis
SINGING PRAISES OF ANGUS: Marcel Moodley, a senior executive with Costco Australia, says Angus Reserve brand beef has been a winner in the company's stores.

SINGING PRAISES OF ANGUS: Marcel Moodley, a senior executive with Costco Australia, says Angus Reserve brand beef has been a winner in the company's stores.

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Global retail giant, Costco, is heaping praise on the success of Angus Reserve brand beef in its Australian stores and now wants Chinese consumers to share the joy.

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When global retail giant, Costco, opens its first store in China later this year its meat shelves will be stocked with Angus beef from Australia.

Costco Australia's assistant general merchandise manager, Marcel Moodley, said Angus branded beef from "down under" would hold pride of place in the Shanghai store.

US-based Costco has been increasing its footprint across Australia since arriving in 2009 and recently opened its 11th store near Ipswich, south west of Brisbane.

Costco Australia began selling Angus Reserve beef supplied by NH Foods' Oakey plant on Queensland's Darling Downs in its outlets - which resemble vast warehouses - in 2013 and Mr Moodley said the decision had been a major winner.

So far Costco Australia had sold almost $150 million worth of Angus Reserve beef with sales continuing to increase.

Mr Moodley said Angus Reserve fitted neatly with Costco's philosophy of offering quality products at the lowest possible price through low retail mark-ups.

In a rapid-fire presentation at last week's Angus through the Ages national conference in Albury, Mr Moodley sang the praises of Angus beef so warmly that another guest speaker described his presentation as "hillsong for beef".

"We are not a price driven company, as a lot of people think. We are quality driven, first and foremost, price is secondary," Mr Moodley said.

"We only deal with suppliers who can make money from us. If you can't make money from us, we don't want to deal with you."

The reason was simple, Mr Moodley said. If retailers squeezed suppliers too hard on price, product quality was usually the first casualty.

Costco's business model is based on annual membership which is needed to shop in its stores worldwide ($60 a year in Australia).

Membership renewal was critical for the company because the fees provided the bulk of the company's profits, he said.

So any slippage in quality was likely to have an impact on membership renewals, he said.

Typically, members shopped at Costco once a fortnight, most buying products in bulk packs and spending an average $150-plus.

Mr Moodley said grainfed Angus Reserve brand beef was delivering consistent quality "every day of the week".

"Angus (beef) will be in Costco as long as I am there," he said.

He said Costco embraced brands and didn't try to "bastardise" them like competitors, Coles and Woolworths.

The company also sells Wagyu beef supplied by NH Foods.

The story Costco boss sings praises of Angus beef first appeared on Farm Online.

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