Thousands of Kiwis flocked to Costco today to check out the new American wholesaler.
Video / NZ Herald
A New Zealand pharmacist controls the only Australasian in-store Costco Wholesale chemist shop, part of the $100 million-plus store which opened in Auckland in September.
Grant Bai, former chief executive of NZX-listed Green Cross Health, owns 51 per cent of Costco New Zealand Pharmacy which trades within the 11,000sq mmembership store at Westgate.
“It was a partnership to bring something new to an environment that’s - let’s face it - has been stagnant for a while,” Bai said of the health sector.
“I’ve been in the health industry for more than 30 years. I’m a pharmacist by profession. I’ve had a passion for bringing healthcare to be more accessible to audiences in various ways. I’m passionate about bringing clinical services into pharmacies,” Bai said.
Costco sells US$190b of goods annually, has 120 million members and, in New Zealand, charges a $60/year membership fee.
To die for: Costco boss Patrick Noone in the coffin section. Photo / supplied
Patrick Noone, Australasian Costco chief, said Westgate was unique among 14 Australasian outlets due to having a pharmacy.
None of the 13 Australian stores had pharmacies within them due to laws across the Tasman, but Noone said many Costcos in other countries had in-store pharmacies.
It was important to create this to give New Zealanders the best value for money and two pharmacists have been employed among around 330 staff, he said in the spring.
“It’s easier here to operate a pharmacy. We have pharmacies in North America, Sweden, Canada and other countries but not Australia,” Noone, a Canadian based in Sydney, said in September.
Asked why he was the majority owner, Bai said a pharmacist needed to be in control of clinical governance.
Bai met Noone and the team from Australia when they were establishing here.
Grant Bai of Costco Pharmacy. Photo / supplied
“It was a health model they were talking about combining pharmacy with audiology and optometry,” Bai said of the two complementary outlets beside the pharmacy space his company leases.
“It seemed interesting to look at that model. That’s a different model from anything else in New Zealand. I like a little bit of disruption.
“I don’t think these services are beside each other like this anywhere else in NZ. Because they’re a membership business, they put in services that help and encourage their members.
“The concept of a health and wellness club is good. The integration seeks to look after the health and wellness of member customers. It’s a little altruistic in terms of their retail offer,” Bai said.
The owners of the Chemist Warehouse have done very well for themselves. Photo / Warren Buckland
Australia’s Chemist Warehouse provided healthy national competition within the sector, he says.
“The beauty of that is its range and prices. Their marketing is just everywhere. They’re a disruptor but in a different way. They’ve probably increased the pharmacy product market.”
Costco Pharmacy did not have huge ranges “but has a good understanding of the population’s health. It matches up the best products at an accessible price point but links it to the health needs of a consumer.
“If you walk into a Chemist Warehouse you’d have every product and lots of it. At Costco Pharmacy, the products are specific to the health and wellness of that community. So the pharmacy itself is relatively big”.
The script count was not as important as offering services like vaccinations, health checks, and common ailment interventions for flu, colds, mouth ulcers and head lice, he said.
“Some cases walk up to the emergency department when they could be treated in a pharmacy. You really want to make common health issues able to be treated by a pharmacist. We spend a bit of time ensuring pharmacists are clinically up to date.”
Costco Pharmacy employed three pharmacists and three technicians.
Costco has seen customers flock to the store since opening late in September. Photo / Jed Bradley
On the products offered, Bai said they were not cheap but good value.
“It’s not some knockoff. They’re top of the line, the best product but also the best price because they’re constantly scanning”.
The pharmacy area was rented from the bigger, wholesale store via a lease.
Costco Wholesale New Zealand owned the remaining 49 per cent. Bai and Noone are directors.
Sales since September were “above budget but not far off it. They’re trading pretty well”.
Most customers were young mothers or the elderly and the store is near checkouts.
Bai has worked all his life in New Zealand, British and Australian pharmacy and medical sectors. He studied pharmacy in Wellington and began at Manly, Whangaparāoa.
He has owned four pharmacies, all in Auckland.
He is a director of the technology company ReScript which makes IT products for doctors, enabling them to transmit scripts from surgeries to pharmacies online.
He is also on the board of Storbie which is an e-commerce platform for the pharmacy sector, helping them get a digital presence on their clinical services.
