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Coles is building two new automated distribution centres and is partnering Uber Eats in Australia.

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Costco in Australia has seen revenue grow by 14% to AU$1.8bn (US$1.3bn) in the 12 months to 3 September 2018.

New stores and LFL growth boost sales

The retailer continues to see good growth in Australia, aided by both new store openings and like-for-like (LFL) growth of between 5% and 6%. As well as strong revenue growth, Costco saw net profit more than double to AU$29.5m (US$21.0m), aided by a one-off credit. The retailer opened two new stores in FY18, taking its total to 10 trading stores.

More stores, a new DC and online launch planned for 2019...

The retailer has strong plans for continued expansion in 2019, with two new stores expected to be added, the launch of an online platform, plus the opening of its new distribution centre, which is under construction in Sydney. The new centre is understood to have capacity to service up to 30 Costco's nationwide and will aid fulfilment of online orders. Although details of the online rollout are unclear, Costco's managing director, Patrick Noone, has confirmed that the service would be available in every state capital city.

For subscribers wanting to see how its operations in Australia fit into its global strategy, see our strategic outlook insight presentation for Costco.

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

Test bed for new products and the next big food trend

The new store, located in the affluent suburb of Double Bay in eastern Sydney, is around a third of the size of a typical Woolworths and is being used as a test bed for new innovative products. The retailer says that organic, healthy options and sustainability are at the heart of the new urban concept and it is designed to compliment the Woolworths supermarket offer that is already present in the same centre right above the store. If products sell well in the store, the retailer may look to roll them out more widely across its supermarket network.

Fresh and healthly food for now and later

As the name suggests the store features a kitchen serving wholesome cafe style food, as well as a barista serving organic coffee, healthy grab and go food options, a florist, a wide range of organic fruit and vegetables, plus an expanded Marco Wholefoods range. In fact, the only Woolworths private label available in the store is its Macro range. The retailer has worked with Australian chef Peter Rowland to develop the kitchen element of the store, which produces a fresh seasonal menu of items to be eaten in-store or taken away.

Sustainability at the heart

Reportedly over 500 products are unique to the store, with a strong focus of the range on local and sustainable products. Carrying on this theme, the shopping trolleys are made of recycled milk bottles and the baskets of recycled soft plastics. To reduce waste, the retailer will look to use excess produce to make fresh juices in-store, while it is also testing smarter packaging solutions.

Not another Thomas Dux...

Having recently disposed of its chain of premium stores, Thomas Dux, many might wonder what is the prupose of this store, in fact the unit it is in was orginally designed for a Thomas Dux store. However, Woolworths has clearly said this is a one-off store.

Woolworths Format Development Director, Rob McCartney, said, “We know that customers in the Double Bay area are looking for more convenient fresh food options. We wanted to create a custom-made offering that was unique to this community, which is how ‘The Kitchen’ by Woolworths was born. Our food journey at ‘The Kitchen’ starts with organic produce, free range, locally sourced products, as well as freshly prepared meals to eat in or pick up and take home."

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.

 

Presentations

31/01/2019
Kaufland is building a more relevant offer for shoppers, which differentiates it from rivals, while maintaining control of costs and driving efficiency. In this report we look at its key strategic aims and the strategies being rolled out in its top four markets.
17/12/2018
We’ve selected 16 innovative store concepts to visit in 2019 which showcase several of the latest trends shaping format development globally. These include the growing role of technology, underpinning both ecommerce and customer engagement, and the creation of immersive in-store experiences.
29/10/2018
We share our forecasts for online, in some of the world's leading markets.
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Key presentation

This in-depth guide to Australia explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.

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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