Retailing is a globalised industry, yet retailers must respond to local shopping habits if they are to be perceived as legitimate by the host country customers. However, some retailers may be unable or unwilling to respond to all customer requirements. Costco, the membership warehouse
club retailer, has been successful in its international expansion efforts, establishing its first Australian store in Melbourne in 2009. In the first 12 months of operation, the store became one of Costco's top five stores in the world. We investigated this success by focussing on the customer
and used institutional theory to analyse what concessions were made by the customer and the company. Data were collected from consumer interviews, site visits and secondary media and industry sources. Analysis revealed negotiations based on the rejection, acceptance or adaptation of the regulative,
normative and cultural cognitive aspects of the Australian shopper and the Costco business model. Customers made concessions to accommodate the new business model, and Costco responded to entrenched Australian shopping habits. This case is the first to explore the outcome of retail internationalisation
from the customers' perspective, revealing the concept of mutual concessions. The interaction and subsequent adaptation by both customer and retailer have resulted in the institutionalisation of new shopping norms in the host country and success for the international retailer.
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Document Type: Research Article
Deakin Graduate School of Business, Deakin University, Burwood, Australia
APRR, Communication Arts, Michigan State University, East Lansing,Michigan, USA
QUT Business School, Queensland University of Technology, Queensland, Australia
Publication date: 2012-12-01
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