It signals Kaufland’s intention to take on German rival Aldi, and further chip away at the dominance of domestic chains like Woolworths and Coles in the $90 billion sector.

By Joe McDonough


Posted on October 6, 2017

German supermarket Kaufland — operated by the world’s fourth largest retailer, Schwarz Group — has bought a site on the outskirts of the Adelaide CBD.

Real estate firm CBRE has confirmed it is the Group’s first acquisition in Australia. It signals the retail giant’s intention to take on German rival Aldi, and further chip away at the dominance of domestic chains like Woolworths and Coles in the $90 billion sector.

Since entering the Australian market in 2001, Aldi has grown its portfolio to 500 stores nation-wide and has carved out a 13.2% share of the market, while Woolworths and Coles both enjoy approximately 35% of the pie.

Kaufland is a warehouse-style grocery chain, which already operates more than 1230 stores in Germany, the Czech Republic, Poland, Bulgaria, Croatia, Romania and Slovakia. And with stores as large as 20,000 square metres, it more closely resembles Costco (which now has nine outlets in Australia) than Coles, which is generally a fifth of that size.

Schwartz reportedly paid $25 million for the 36,000 square metre Le Cornu site in Forestville, which is just 3km from the CBD and fronts the busy Anzac Highway. Australian Financial Review reports that it spent the past 12 months assessing potential properties before deciding on this location for its flagship store.

The Kaufland Australia website confirms the Group’s plans to expand. “We are a growth-oriented corporation continually assessing our expansion possibilities in existing and potential markets. With this in mind, we are currently conducting a feasibility study by analysing the Australian market.”