WHS - Warehouse Group

[Beagle]

Cheap as. These guys know what they're doing.

Honestly mate, you have no idea what its like to get around Auckland day after day after day...it grinds you down to the point where you really can't be bothered and just shop in your local area. Quite apart from that is the cost of getting around Auckland. I might stop in there when I'm over that way visiting my friend in Westgate but if they're asking to to subscribe at $100 per annum just for the right to shop there....that's simply not going to happen and I think you'll find the vast majority of Aucklanders will feel the same way.

[Panda-NZ-]

You would need a light truck to stock up at the one costco location too. Sounds like drudgery

[LaserEyeKiwi]

Copying this comment from HLG thread:

Not according to this but who knows. Latest For Bar Review..

We pick that there will be no changes for the upcoming S&P/NZX June 2021 quarterly index review (headline indices).Official outcomes of the review will be announced close of market Friday, 11 June 2021, with an effective date, close of
market Friday, 18 June 2021.
Figure 1. June 2021 Review: The Forsyth Barr Pick
Index Enter Exit Expected Weight (rank)
S&P/NZX 10 no changes n/a
S&P/NZX 20 no changes n/a
S&P/NZX 50 no changes n/a
S&P/NZX 50 Portfolio no changes n/a
Source: Forsyth Barr analysis
The current status
The recent sell down of 31.6m WHS shares by Foodstuffs has boosted the WHS ranking (six-month average market cap) and by our
calculations will rank as the highest non-member post the upcoming June 2021 index review.
Figure 2 outlines the current rankings for inclusion/exclusion for the benchmark S&P/NZX 50 indices. At this stage, we see no obvious
near term changes ahead. The six-month average market cap automatic entry level to the benchmark index is currently above $430m
with the exit level below $283m.
Figure 2. Current Rankings for S&P/NZX 50 Index Inclusion/Exclusion
Ranking Code Current status 6-mth average price 6-mth average market cap
42 SKO S&P/NZX 50 Member $6.04
43 FSF S&P/NZX 50 Member $4.56
44 (entry level) VGL S&P/NZX 50 Member $1.88 $429.63m
45 SAN S&P/NZX 50 Member $4.76 $391.98m
46 RBD S&P/NZX 50 Member $12.47
47 SML S&P/NZX 50 Member $4.20 $376.38m
48 WHS* $3.20 $356.28m
49 TLT $6.63 $349.97m
50 HLG $7.19 $343.31m
51 ERD $4.84 $332.77m
52 NPH S&P/NZX 50 Member $3.44
53 THL S&P/NZX 50 Member $2.47 $299.91m
54 SKT S&P/NZX 50 Member $0.17 $298.05m
55 MFB** $1.56 $283.78m
56 (exit level) BGP $5.42 $277.50m
57 TRA $3.30 $214.67m
58 CVT $3.24 $174.44m

I do find it weird they have WHS as a market cap of $356m, when it has a market cap today of $1.17 billion (regardless of the free float size - it dwarfs any other company mentioned in both size and importance).

[SBQ]

$100 membership fee for one store.

In Auckland which is overcrowded and hard to get around in. who will be interested in that?

$100 is nothing when you could save that much on a $1,000 purchase at Costco. We are not talking about a 5 or 10% discount in savings here. This is at near wholesale pricing so you would be buying items that are near the price that well say Food Stuff or other big players that are buying at. Ie. the Fontera selling milk to Pak N Save can also sell to Costco - work out the profit margin?

NZ's habit of shopping 2 or 3 times a week to buy grub will have to change if they venture to Costco. Factor a budget of spending for at least 1 - 2 weeks of supplies ; therefore the hassles of driving out that way would be worth the effort. Of course those that live way too far away need not apply. For eg. in Anchorage Alaska they have 2 Costco places for a population of 280K.

What i'm skeptical is will the NZ producers sell to Costco? Many would have lock in plans with their current buyers though i'm sure over time that will change.

[Panda-NZ-]

Costco is relatively new to a high consumption tax so they will enjoy that experience.

0% in US and 5% in canada.

[LaserEyeKiwi]

Costco is relatively new to a high consumption tax so they will enjoy that experience.

0% in US and 5% in canada.

most states in the US have a sales tax. Amount varies state by state.

also worth pointing out that the vast majority of Costco sales are from segments that WHS doesn’t have a large exposure with: food is most of their sales, followed by “Ancillary products” (pharmacy, gasoline sales), and then their two smallest revenue segments are what WHS would consider as competing areas: “hardlines” (hardware, appliances etc) & their smallest revenue segment is “soft lines” (small appliances, clothing etc) which is WHS bread and butter.

I would think it would be the food retailers that would be most bothered by Costco entry.

[Beagle]

Please forgive me having a massive yawn here https://www.bing.com/images/search?v...t=0&ajaxserp=0
Heard it all before.... H&M, Zara, XYZ, ABC is going to destroy HLG.
The reality of life for most Kiwi families is they live one paycheck to the next and most are incapable of buying in bulk...ask me how I know...40 years of being an accountant.
I think this is really small potatoes in terms of its effect on WHS...lets get back to talking about WHS's really strong balance sheet and exceptionally strong cash position and its truly compelling investment metrics.

[X-men]

I bloody agree with that Beagle! Majority kiwis are not buying in bulk...most of kiwis live on payday after another...

[Gunner]

And it's really hard to break into a small far away market like NZ. Companies like the Warehouse have huge market share in prime locations throughout NZ. Will little nz really excite Costco? I highly doubt it. Select locations in Auckland will interest them but not the rest of NZ imo.

[Panda-NZ-]

Yes and as previously stated it's mainly food items where they offer savings.

You can't bulk buy a fridge or coffee machine etc.