England may have been humiliated by Iceland in Euro 2016 last June, but it appears that has not stopped Costco from turning to Britain to try to conquer the country.
The wholesale outlet opened its doors for the first time in Reykjavik last Tuesday, using products from the UK to stock its new warehouse.
But, despite the fact Walkers crisps lined the walls rather than the nation’s favourite Lay’s, it has not deterred one in eight Icelanders signing up to the US-based chain - setting a new company record for member sign-ups in a new country.
Steve Pappas, senior vice-president of Costco Europe, said the wholesale outlet decided to run the business from the UK as it makes “replenishing easier”.
“Iceland is closer to the UK than it is to Canada or the US,” he said. “The Costco Wholesale UK buying team have over 20 years’ experience importing into UK or Europe and sourcing products within Europe. Our decision to support Iceland from the UK leverages that experience. There are also a hundreds of global food and non-food items within Costco UK’s assortment that are sold by Costco in the US and elsewhere.”
Costco is planning to open a total of 26 new outlets this year, including one in France for the first time later this month.
And if the approach in Iceland works, “we can apply the model to other smaller international markets that we would not have previously considered”, added Pappas.
“The relatively small size of the market does not warrant the typical staffing infrastructure that we have in place in other countries where we do business - ie Spain, France or Australia,” he said.
But not all products are being transferred from the UK. Meat, fish and poultry are being sourced locally, as well as confectionery, soft drinks, condiments, dried fish, and dairy.
Icelandic distributors are also supplying electronics, small appliances, and white goods.
“For the most part, products that are compliant with regulations in the UK can be imported easily into Iceland,” added Pappas.
“We do stock Heinz ketchup in Iceland, which we sell in Costco’s global pack configuration, but we are also stocking a full pallet of Hunt’s ketchup as we are well aware of the market preference.
“Petrol is also purchased from an Icelandic distributor. Additionally, most of the ingredients in our on-site produced ready meals are locally sourced.”
Some tens of thousands of Icelanders have visited the store since its opening last week.
“So far our opening in Iceland has been a great success,” said Pappas.
“Our new member sign-ups have set a new record for a first Costco warehouse in a new country and our first week’s sales have exceeded expectations by a significant margin. We are very excited by the welcome we have received in Reykjavik, which proves that high-quality products at low prices is a formula that can work anywhere.”