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Woolworths in Australia has launched a new concept store called 'The kitchen' by Woolworths, focused on health, wellness, organic and eco-friendly innovation.

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According to reports in Australia, Kaufland has applied to build six stores in Victoria.

Construction could start in early 2019

Kaufland has applied for planning permission for six stores in Melbourne, which if approved will be the first stores to open in the market. Construction could start early next year on sites in Dandenong, Coolaroo, Chirnside Park, Epping, Mornington and Oakleigh South. Store are expected to be 4,000 sq m with space sublet to third-party service providers such as foodservice outlets and dry cleaners.

Strategy will be to build scale quickly in cities

Kaufland's market entry is undoubtably getting closer and although these reports are not confirmed by the retailer, if true they show the intent to build scale quickly in major metropolitan areas. Previously it has been reported that the retailer is actively scouting sites in Sydney and Adelaide, plus has been recruiting state managers for all major states on the eastern seaboard.

 

Amazon has ramped up competition levels in Australia, offering FMCG products at prices 50% cheaper than those available at Coles and Woolworths.

Australia's favourite brands included

Amazon has cut the price of a number of favourite FMCG brands in Australia, as the retailer attempts to gain a stronger foothold in the market. The online retailer is offering products from brands such as Colgate, Huggies, Omo and Finsih at prices up to 50% cheaper than can be found at other retailers. Alongside the price cuts, Amazon appears to be closely price matching Coles and Woolworths, but also offers free delivery to Prime members as an added advantage.

Tempting new customers to test Amazon Pantry

Amazon rapadily introduced a range of 2,500 food and grocery products onto its site under the Amazon Pantry heading earlier this year and is clearly looking to muscle in on the Australian grocery market. These latest price cuts may not be sustained, but are sure to grab shoppers attension and encourage more people to test out the new service.

Metcash has releases HY results with sales revenue up 2.2% to AU$6.2bn and EBIT increasing 1.2% to AU$158.1m.

Food sales up 1.0% to AU$4.3bn

Supermarket sales were flat at AU$3.6bn, aided by easing price deflation duiring the half. Growth on the east coast and flat sales in South Australia were offset my declines in Western Australia. Wholesale sales declined -1.9%, although this marked an improvement on the same period last year, the majority of the decline was also attribuited to poor performance in Western Australia. Sales improved across the IGA network, although LFL sales continued to decline by -0.2% (-1.1% H1 last year). Convenience sales increased 5.4% to AU$762.9m, due to sales growth, both LFL and footprint expansion, from a large contract customer. 

Continue progress against strategy

Metcash continued to advance against its strategic objectives. Approximately 350 stores have now been included in the Diamond Store program, with another 23 added in H1 and 73 in progress. With average stores sales up >10%, Metcash has simplified the program and plans to accelerate the roll out in FY20. Around 240 products are now available under the CommunityCo private lable brand, with 80 products added including fresh food lines. Metcash continues to improve retailer engagement with a new long-term supply agreement with Foodland in South Australia, an improved range and pricing stratgey, plus a new trading model for SA and WA retailers. As part of the agreement with Foodland it will develop a new 68,000 sq m food and liquor DC that will be completed in mid-2020. It has also introduced a new state-based operational structure to enable faster decision making.

Liquor sales up 6.7% to AU$1.8bn

Modest volume growth was offset by shopper preferences for more premium items. IBA bannered stores, as well as ALM wholesale customers both saw sales grow, with ALM benefiting from new large contract customers. Wholesale sales to IBA bannered stores saw LFL sales grow 2.0%, supported by the 'best store in town' initiative. Other inititaives implemented included; improvements to private label ranges with SKU's increased to 70 across beers, wine and spirits categories and sales growth of c.30%, improvements to the on-premise team, 38 IBA stores refreshed and 53 cool room upgrades, plus improvements to range with more premoium, regional products and range extensions.

Competitive environment will remain challenging

Metcash expects market conditions to remain tough for the rest of the year, but are encouraged by progress in the half. Group CEO, Jeff Adams, commented, "The first half results were pleasing in the face of challenging market conditions, with the Group delivering improved sales and earnings. Our Supermarkets Pillar continued to face challenging market conditions, however it was encouraging to see a slowdown in the rate of deflation which helped deliver an improvement in the sales trajectory for both ourselves and our retailer network."

 

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29/10/2018
We share our forecasts for online, in some of the world's leading markets.
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See our up to date 2018 content plan for insight presentations on retailers, trends and channels globally.
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We dive into stores around the world to see how retailers are adapting to the growing demand for organic products. Our research focuses on markets where the organic sector is already well established, including North America and Europe.
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We examine the latest retailer performance in Australia, as well as review the major trends that we identified at the start of 2018.
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We consider five themes shaping development and how the format could innovate in the future.
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This in-depth guide to Australia explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.

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We've developed a single, universal methodology for calculating food and consumer goods retail data, supported by our programme of primary and secondary research. This makes Retail Analysis the most reliable and robust source available for data of this type. 

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