Kaufland closer to Australia entry

Date : 10 March 2017

The German retailer, part of Schwarz Group, has confirmed its intension to enter Australia with the launch of a new website, the recruitment of personnel and has started to actively seek new store locations.

Melbourne is retailers new HQ

In November last year, Kaufland announced that it was actively conducting a feasibility study for entry into the Australian market. However, the retailer appears to getting closer to a full launch. Having chosen Melbourne as its Australian HQ, it has set up a new Australian website. Kaufland has kicked off recruitment, mainly focused on setting up a property function. It is also looking to start securing land or existing project developments. The website says that 'Kaufland is coming to Australia' and 'has ambitious Australian investment and development plans', a significant move on from where it was at the end of 2016.

Stores likely to be large standalone formats

The website explains what we can expect from a Kaufland launch, with an ideal layout of its store developments. The retailer is seeking plots of at least 10,000 sq m, ideally 15-000 to 20,000 sq m that will accommodate a standalone store, plus 200-300 parking spaces. The requirements signal that Kaufland aims to enter Australia with a similar offer to what it operates in other markets, with stores of c.3,000 sq m, focused on mainly on food, with a strong private label offer. The success of Aldi and Costco in recent years, from both a discount and large destination format perspective, respectively will give the retailer confidence that its offer will provide significantly more choice to Australian shoppers,

Kaufland has a successful Central European network

Kaufland operates a similar strategy to Aldi in terms of private label brands that are only available through its stores. Aldi's international and Australian-specific brands are now household names across much of the country and Kaufland will hope that a similar strategy will win over shoppers. However, the difference with Kaufland, who is part of Schwarz Group, which also operate discount chain Lidl, is that its stores stock a much wider range of products, with up to 40,000 SKU's. Kaufland already operates 1,230 stores in Central and Eastern Europe, including; Germany, the Czech Republic, Poland, Bulgaria, Croatia, Romania and Slovakia.