Costco has cleared planning approval for a $74 million warehouse and service station in Pakenham, southeast Melbourne. The site will include a 14,268 square metre store, a 32-bowser petrol station, and 836 car parks. It will be Costco’s 16th Australian location and its fifth in Victoria. Cardinia Shire Council approved the planning permit at its 18 May meeting.
The new site lands at a moment when Costco has overtaken Aldi on profit. Filings show Costco’s Australian sales reached $12.6 billion in the year to August 2025, up from $11.4 billion the year before. Profit after tax came in at $499.2 million. Aldi, with more than 600 stores against Costco’s 15, recorded $13.3 billion in sales and $403.7 million in profit. Costco is doing more per site than any other supermarket-adjacent retailer in the country, and it’s expanding the model.
What the fuel offer does
A 32-bowser site is large. Costco’s fuel pricing is consistently among the cheapest in any catchment it operates in, with the trade-off that fuel is members-only. Annual memberships range from $65 to $130.
For independent operators within a Costco catchment, the competitive effect is real but bounded. Costco’s volume customers tend to be high-mileage, price-sensitive drivers who already plan their fuel purchases. Convenience buyers, the customer stopping for coffee, a snack, or one tank between errands, typically don’t shift to a members-only model for a few cents per litre saving.
The structural pressure is on the price-only customer. Operators whose fuel volume depends on undercutting the local market will feel a Costco arrival more than operators whose customers come for the basket, the location, or the relationship.
What to watch
Costco has flagged another new site in Alkimos, Perth, opening in 2027. The pattern is clear: large-format, fuel-anchored, membership-driven, targeted at outer-metro growth corridors. Operators in similar corridors should expect Costco interest in their catchment over the next three to five years.
The independent operator response is the same as for any major competitor. Know your catchment. Understand which customers are at risk and which aren’t. Protect the convenience offer that Costco doesn’t compete on. The fuel-only price war isn’t winnable. The basket and the relationship are.