The arrival of the US wholesale giant Costco in Iceland this spring will have a large impact on wholesalers and domestic producers, according to Ólafur Stephensen, CEO of the Icelandic Federation of Trade (Félag atvinnurekenda). The soft drink producer Ölgerðin and the meat production company SS (Sláturfélag suðurlands) are currently negotiating with suppliers abroad to obtain certain goods for wholesale at lower prices, RÚV reports.
Costco plans to open its store in Garðabær, near Reykjavík, in May. According to Ólafur, although Costco plans to buy from domestic suppliers, the company will import directly the goods it carries. Thus, the arrival of Costco means competition will increase at all levels.
Árni Pétur Jónsson, CEO of the 10-11 grocery chain, does not rule out purchasing goods from Costco for resale. Arnar I. Jónsson, securities analyst at Landsbanki, stated that in light of Costco’s opening, retailers and wholesalers in Iceland must reach better deals with suppliers, domestic as well as foreign.
He told Fréttablaðið, “Those who don’t fear this competitor, underestimate it greatly.”
Andri Þór Guðmundsson, CEO of Ölgerðin, remarked, “It’s quite clear that they [Costco] are offering very good prices, and in some cases we won’t be able to compete with them.”