ONE of America's biggest retailing groups, Costco, has been given planning permission for a shopping club in west Dublin, which would be four times larger than a big Irish supermarket.
ONE of America's biggest retailing groups, Costco, has been given planning permission for a shopping club in west Dublin, which would be four times larger than a big Irish supermarket.
RGDATA, the independent retailers group, has appealed the decision to An Bord Planeala claiming that the outlet would breach the South Dublin Co Council development plan for the area.
The proposal is for an industrial estate at Fonthill Road, close to the M50 near Clondalkin and Lucan, on a site of 12.5 acres.
Costco is planning to build a development of 120,000 square feet in gross floor space with almost 800 car parking spaces.
The US company already has British outlets in Edinburgh, Leeds, Manchester, Liverpool, Glasgow, Watford and Thurrock, in Scotland.
Costco has a total turnover from all its operations of £14.4bn and profits of £186m and 11pc return on capital employed.
It uses a highly unusual form of retailing which is similar to a cash and carry, although many members of the public are allowed to buy in the store if they belong to certain categories in society.
Under the membership criteria only 10pc of the population is allowed join and is usually restricted to people who belong to professions which contain high spenders.
By maintaining strict credit-related membership barriers, Costco keeps bad debts at 1pc of turnover.
The members have to pay a fee of around £20 to join and buy from the some of the 3,600 product ranges which are split evenly between food and non food.
Over the past three years its operations in the UK have made a cumulative loss of stg£10m, while turnover for the year ending September 1996 was stg£161m.
In the UK the stores have met heavy opposition from major supermarket groups which have been putting pressure on planning officials not to give them permission.
Shelflife, the retail trade magazine, yesterday reported Costco sent a letter to Irish shops complaining about RGDATA's planning appeal.
A copy of the RGDATA document appealing the planning decision, and seen by the Irish Independent, said that the Costco proposal was neither a cash and carry nor a retail warehouse but has sufficient food sales within it to fall into the category of a shopping or major sales outlet.
The submission claims the development ``represents a material contravention of the 1993 County Development plan. Its impact on established retail shopping will be adverse, its traffic implications unsustainable and its visual appearance in conflict with the residential amenities of the zone on the far side of the road''.
RGDATA also said that the development was seeking customers from up to 30 minutes drive away and would place ``unenvisaged retail shopping trips on the national road network and thereby conflicts with the objectives of the Dublin Transport Initiative regarding sustainability''.
Industry sources also speculate that the superstore ban which was temporarily introduced by Environment Minister Noel Dempsey recently on supermarkets over 40,000 square feet could also have implications for the outlet if it was viewed as a food store.
A Costco spokesperson could not be contacted to comment on the planning appeal.
As an expert in retail and business strategy, I can provide valuable insights into the situation involving Costco's planning permission for a shopping club in west Dublin. My extensive knowledge in retail operations, market dynamics, and strategic planning allows me to dissect the key concepts in this article.
Firstly, Costco is a major American retailing group known for its unique business model, resembling a cash and carry but open to certain segments of the public. The company operates with a membership system, allowing access to a select group, often comprised of high spenders belonging to specific professions. The membership criteria, strict credit-related barriers, and a fee of around £20 contribute to a business strategy that keeps bad debts at an impressively low 1% of turnover.
In terms of financials, Costco boasts a substantial total turnover of £14.4bn, profits of £186m, and an 11% return on capital employed. This success is despite facing challenges, as indicated by its cumulative loss of stg£10m over three years in the UK, where it has encountered opposition from major supermarket groups.
The planning permission granted for a shopping club in west Dublin, four times larger than a typical Irish supermarket, has triggered an appeal by RGDATA, an independent retailers group. RGDATA argues that the proposed development on Fonthill Road would breach the South Dublin Co Council development plan for the area. The appeal suggests that the Costco proposal doesn't neatly fit into the categories of a cash and carry or a retail warehouse. Instead, it is described as a shopping or major sales outlet, potentially conflicting with the established retail shopping landscape and the Dublin Transport Initiative objectives regarding sustainability.
The article also mentions Costco's letter to Irish shops complaining about RGDATA's planning appeal, indicating the company's determination to proceed with its plans. However, the potential implications of the superstore ban on outlets over 40,000 square feet, introduced by Environment Minister Noel Dempsey, could add another layer of complexity to the situation, particularly if the outlet is viewed as a food store.
In summary, the situation involves a clash between a retail giant's expansion plans and local regulatory concerns, with arguments about the nature of the proposed development, its impact on the area, and potential conflicts with existing plans and initiatives.
