After weeks of speculation on industry media, as well as Australian news, Schwartz Group's Kaufland has confirmed it is conducting a feasibility study in Australia.
Kaufland have significant presence across Europe
Schwatrz Group who operate both the Lidl and Kaufland banners, has for a number of years been linked to a market entry into Australia via its Lidl discount format, a logical decision given the success of Aldi in the market. However, a few weeks ago rumours started to circulate that sister banner Kaufland is also interested in the market. Kaufland is similar to the discount model in that it has a strong price message and private label strategy, although operates as a hypermarket format, with existing operations across Germany, Poland, Czech Republic, Bulgaria, Croatia, Slovakia and Romania.
Offer provides an 'interesting alternative for customers'
A spokesperson for Kaufland, commented, "We are presently analysing the chances of entering the Australian market. This is why we are currently conducting a feasibility study. Only after having completed those studies, we will be able to come to a decision regarding a possible market entry. If the analysis is regarded as being viable, we will be starting a pre-operational phase of securing developments and properties. We are convinced that Kaufland with its attractive business model is offering an interesting alternative for its customers in various countries."
Lidl or Kaufland - is the entry of one or both inevitable?
Although Kaufland and Lidl are both operated by Schwartz, they do act independently of each other. Therefore, if Kaufland decide to launch it does not discount a potential Lidl market entry as well. However, whether there is room for two additional operators in the Australian market would be highly debatable. There is an obvious omission of a hypermarket operator in Australia currently, although with an existing high concentration of supermarkets, coupled with rising ecommerce penetration and a global shift towards smaller large stores, a decision to launch a new hypermarket format into Australia could be viewed as a bold move.