German Supermarket Giant Bolsters Victorian Footprint

German supermarket giant Kaufland has started flexing its muscle, receiving approval for a further two stores in Victoria while also planning at least nine more.

The German supermarket discounter, owned by parent company Schwarz Group ⁠— the fourth biggest retailer in the world, has continued its push into Australia underlining its ambitious plans to take on Woolworths, Coles, Aldi, IGA and Costco.

After confirming in 2017 it had an “ambitious Australian investment and development program”, Kaufland has moved quickly outlaying $435 million for what analysts believe could become Australia's fourth largest food and grocery chain.

Kaufland has made inroads into Victoria, sounding out Melbourne as the entry point for its Australian expansion, joining the likes of Costco, Aldi, Uniqlo, H&M and MUJI.

Victorian minister for economic development Tim Pallas announced the go-ahead for stores in Coolaroo and Oakleigh South, with the latter to also house Kaufland’s headquarters.

“This is great news for consumers — another major player in the market will provide more choice for Victorians, more value for money at the checkout and create thousands of jobs.”

The European supermarket giant has three sites already approved in Dandenong, Epping and Chirnside Park, and is building a fully automated 115,000sq m warehouse in Melbourne’s outer north.

Kaufland now has further plans to build at least nine additional stores across Victoria — in Braybrook, Lyndhurst, Geelong, South Morang, Bendigo, Narre Warren, Warrnambool, Coburg and Pakenham, moving into sites vacated by Bunnings, Masters, Target and Big W.

The supermarket giant, which builds large warehouse-format stores averaging 20,000sq m (five times the size of a standard Woolworths or Coles) will carry a wide range of fresh food and packaged groceries as well as clothing and footwear, electronics, homewares, sports goods, stationery, garden products and hardware

“With five approved stores, as well as the additional nine sites under review, we are committed to our long term, sustainable growth across Victoria,” Kaufland Australia managing director Julia Kern said.

The rapidly expanding supermarket chain has also filed an application for a store in Toowoomba, Queensland. The brand has applied to put a supermarket on a site at 353-359 Anzac Avenue in Harristown.

Kaufland's first hypermarkets are now expected to open in 2020, rather than 2019.