Red roses are already on their way to Europe, and will be gifted to blushing Valentines in Germany, Italy and the UK. Some in Mumbai, Vadodara, Ahmedabad, and New Delhi will also be celebrating the St Valentine’s Day with roses and diamonds from Surat.

The men behind the Rs 50,000-crore Surat diamond industry see a 25% profit margin in the trade, which has lower risks and lesser working capital. A diamond exporter, who did not want to be named, is planning to diversify into roses next year. As many as 45 green houses in Surat, have started production and have been sending trial produce to domestic markets as far as New Delhi.

Others are most likely to harvest their roses within this year. Says DZ Patel, deputy director horticulture, Surat: “About 35 lakh roses were exported, of which more than 10 lakh were for Valentines. The production and exports will double next year. The quality is better than what is grown in Bangalore, and we expect the region to become the rose hub in a few years.”
Of the 10 lakh roses to be supplied overseas for Valentines from the region, 70% will be red in colour. The number is likely to go up significantly when other rose-growing green houses start production by this year-end.
“Germany and Italy are Valentine-specific markets,” says Best Roses Biotech promoter Dipak Patel. “Japan is hot throughout the year and that is where the bulk orders come from. The demand doubles during Valentine’s Day. So we have to plan the harvest accordingly.”

Mr Patel was a diamond exporter for 30 years before becoming a rose grower and exporter five years ago. About 85 others have followed suit and have set up rose farming units. The area’s moist and comparatively cooler climate (when compared to other regions of Gujarat) provides the right kind of atmosphere for the rose boom, says Barot joint-director agriculture, Gujarat.

“Given the kind of units that are coming up here, South Gujarat could become the rose hub of India,” says DZ Patel, who counts about 85 units listed as rose-producers by the Government of Gujarat. Diamonds will remain Surat’s first preference (and most of the prospective Valentine’s too), but roses have proved to be as joyful. For Mr Patel, the switchover from diamonds to roses has also brought him better health and peace of mind.

Costco, which will charge as much $60 in annual membership fees to Australian customers, will open its Melbourne outlet Aug. 17 with a 14,000 square meter (151,000 square feet) store, almost three times the size of typical supermarkets.

”We operate with low margins and with our membership fees, we can sustain low margins,” Australian Managing Director Patrick Noone said in an interview. ”Lower prices are important because people shop with us to get value.”

The Melbourne outlet, located in Docklands on the fringe of the central business district, will be followed by a store in Sydney’s western suburbs before Costco looks at more openings in the nation of almost 22 million. The Washington-based retailer enters a market where Woolworths and Wesfarmers’ Coles unit control almost three-quarters of retail grocery sales.

”We’ll have to see a competitive response from Coles and
Woolworths,” said Saxon Nicholls, at Herschel Asset Management in Melbourne. ”The Australian retailers already have substantial scale in the market and it will depend on Costco getting its own scale in Australia.”

Fundamental difference

Costco’s impact on rivals may extend beyond any market share it wins, with the company’s practice of pricing goods as much as 15 per cent below rivals likely to influence perceptions of value, according to analysts at Macquarie Group.

”Membership fees allow Costco to operate at low margins and are a fundamental difference in the business model,” Macquarie said in a July 7 note to clients. ”All other retailers of like products could be forced to price within these bounds depending on consumer response to Costco.”

Noone, an Australian who has worked for Costco for two decades, said the size of the Australian network will depend on the success of the first two outlets, with the company typically targeting a ratio of one store per 500,000 people.

”It all depends on how well we do what we say we are going to in Australia,” Noone said. ”When I was in Canada we started building warehouses to that ratio but when I left our brand name was such that we could build to 200,000 or 300,000 people and have a successful store.”

Vegemite, not peanut butter

The Australian outlets will carry about 3,800 product lines, compared with 27,000 in some Coles outlets, with some variation for local tastes. Instead of bulk packages of peanut butter popular in the US, Costco may stock items such as large sizes of Vegemite.

While both Coles and Woolworths trial hardwood floors, redesigned fresh produce sections and new shelving in their supermarkets, Costco maintains its warehouse design with concrete floors, exposed light fittings and inventory stacked on wooden pallets.

The Australian unit has no plans to sell coffins, as some of its US outlets do, although Noone expects the product range to evolve as Costco gains acceptance from consumers.

”If we can get good volume we will stock it and sell it,” Noone said. ”We look at areas we can show great value and that is why we sell diamonds and liquor and candy and all the other things.”

Costco, which will charge as much $60 in annual membership fees to Australian customers, will open its Melbourne outlet Aug. 17 with a 14,000 square meter (151,000 square feet) store, almost three times the size of typical supermarkets.

”We operate with low margins and with our membership fees, we can sustain low margins,” Australian Managing Director Patrick Noone said in an interview. ”Lower prices are important because people shop with us to get value.”

The Melbourne outlet, located in Docklands on the fringe of the central business district, will be followed by a store in Sydney’s western suburbs before Costco looks at more openings in the nation of almost 22 million. The Washington-based retailer enters a market where Woolworths and Wesfarmers’ Coles unit control almost three-quarters of retail grocery sales.

”We’ll have to see a competitive response from Coles and
Woolworths,” said Saxon Nicholls, at Herschel Asset Management in Melbourne. ”The Australian retailers already have substantial scale in the market and it will depend on Costco getting its own scale in Australia.”

Fundamental difference

Costco’s impact on rivals may extend beyond any market share it wins, with the company’s practice of pricing goods as much as 15 per cent below rivals likely to influence perceptions of value, according to analysts at Macquarie Group.

”Membership fees allow Costco to operate at low margins and are a fundamental difference in the business model,” Macquarie said in a July 7 note to clients. ”All other retailers of like products could be forced to price within these bounds depending on consumer response to Costco.”

Noone, an Australian who has worked for Costco for two decades, said the size of the Australian network will depend on the success of the first two outlets, with the company typically targeting a ratio of one store per 500,000 people.

”It all depends on how well we do what we say we are going to in Australia,” Noone said. ”When I was in Canada we started building warehouses to that ratio but when I left our brand name was such that we could build to 200,000 or 300,000 people and have a successful store.”

Vegemite, not peanut butter

The Australian outlets will carry about 3,800 product lines, compared with 27,000 in some Coles outlets, with some variation for local tastes. Instead of bulk packages of peanut butter popular in the US, Costco may stock items such as large sizes of Vegemite.

While both Coles and Woolworths trial hardwood floors, redesigned fresh produce sections and new shelving in their supermarkets, Costco maintains its warehouse design with concrete floors, exposed light fittings and inventory stacked on wooden pallets.

The Australian unit has no plans to sell coffins, as some of its US outlets do, although Noone expects the product range to evolve as Costco gains acceptance from consumers.

”If we can get good volume we will stock it and sell it,” Noone said. ”We look at areas we can show great value and that is why we sell diamonds and liquor and candy and all the other things.”