Bunhill: Wary of warehouse clubs

NICE to see a businessman admitting to a mistake for once. Sir Ian MacLaurin, chairman of Tesco, confessed in the Investors Chronicle last week that he and other supermarket bosses had made 'an absolutely ghastly error' taking legal action against Costco, the US warehouse club, in a futile attempt to stop it opening in the UK. 'We gave them lots of free publicity which I'm sure they greatly enjoyed.'

The grocers have been wiser about Cargo Club, a similar superstore that opens this week in Croydon, south London. This time there has been barely a peep out of them.

Even so the club, which is owned by the cash-and-carry group Nurdin & Peacock, has managed to recruit almost 10,000 members at pounds 25 a head before opening its doors.

Cargo Club, which covers an area the size of 13 football pitches, hopes its roller-skating shop assistants and hefty discounts will attract many more members. It will offer a limited range of food, electrical goods, clothing and furniture to small businesses and better-off householders. The new Ford Probe will be on sale there, courtesy of a joint venture with a local car dealer.

I suspect some publishers won't be too happy with the book department, where best- sellers will be slashed by up to 30 per cent. Edwina Currie's A Parliamentary Affair is reduced from pounds 15.99 to pounds 10.99. John Grisham's The Pelican Brief is down from pounds 4.99 to pounds 3.49.

The price cuts come close to breaching the Net Book Agreement, the restrictive practice that prevents retailers from discounting. Cargo Club insists it is a wholesaler, not a retailer. Mark Riches, managing director, says: 'We're going to mark the books for trade customers only. Hopefully, ordinary consumers won't pick them up. We've done all we can do.'