German supermarket chain Kaufland pulls out of Australia, risking another eyesore at a former Le Cornu site
German supermarket chain Kaufland is pulling out of the Australian market - creating yet another eyesore construction site at a former Le Cornu. The half-built Prospect site will also be sold.
SA Business
Don't miss out on the headlines from SA Business. Followed categories will be added to My News.
- Kaufland wins approval to build on old Le Cornu site at Forestville
- Kaufland to build first SA store on Churchill Rd at Prospect
German supermarket giant Kaufland has announced its sudden exit from the Australian market.
The bombshell exit of German supermarket giant Kaufland from Australia has potentially wiped hundreds of retail and construction jobs from the local pipeline.
In a shock statement, the company said it would start an “orderly withdrawal”, a little over two years since announcing its arrival with the $25 million purchase of the Le Cornu site on Anzac Highway.
Local Labor MP Jayne Stinson said the exit could create another “eyesore scarring our streetscape for years to come”.
Ms Stinson said it could be a repeat of the former Le Cornu site in North Adelaide, which has been dogged by controversy for more than 30 years.
“There is a now uncertainty hanging over the future of this landmark site,” Ms Stinson said.
However, Unley Mayor Michael Hewitson said the council viewed the move more positively and thought the site had "great potential".
"We see it as an opportunity. The asbestos is all gone and it’s a now green-filled site. There's a lot of interest in that site ... For the City of Unley it’s actually a great opportunity," he told ABC Radio Adelaide.
Mr Hewitson said the site was located "so well". "We’re happy to explore all the opportunities that come up."
The Forestville site is one of several across Adelaide that have been left in limbo following Kaufland’s exit, coming just four months after work began on what was to become its first SA store, and the country’s first, on Churchill Rd at Prospect.
The company was seeking approval for an outlet at Paradise, while an industry source confirmed it was closing in on two more site acquisitions at Seaford and Angle Vale.
Each store was expected to create more than 150 construction jobs and at least 100 retail jobs.
A Kaufland spokesman said it would review each site it owned before selling them.“That includes whether to complete construction and then sell, or sell as it stands as a going concern,” he said.
The company had established a property development and construction team in SA in preparation for its expansion.
It declined to comment on how many SA jobs would be affected by its departure.
Kaufland promised to shake up Australia’s fiercely competitive grocery market with huge, warehouse-style stores of up to 20,000 sq m and selling up to 60,000 goods, ranging from cheese slices to car tyres.
In a statement, the company said it wanted to concentrate on its “core business” in Europe.
Frank Schumann, acting CEO of Kaufland International, said: “This was not an easy decision for us. We always felt welcome in Australia.”
“We would like to thank our employees and we apologise for the disruption this decision will cause.
“In Europe, we see a great deal of growth potential. We will actively shape the consolidation of the European retail sector, thus further reinforcing our leading position.”
The company’s 200 Australian employees were told of the decision yesterday and were promised “generous packages, including all entitlements”.
The $24 million Prospect store was to become a testing facility to train staff and trial proposed concepts ahead of a national rollout.
At an official sod-turning ceremony in September, Premier Steven Marshall billed the retailer’s expansion as a sign of confidence in the state’s economy, “reinforcing that we are heading in the right direction”.
Prospect Mayor David O’Loughlin, who last year told The Advertiser the council was excited to see another “blighted part” of the city being developed, was disappointed the Churchill Rd store, on the corner of Grand Junction Rd, would not go ahead.
He said the district had been waiting for more than 40 years for “something major to happen on that corner”.
“We certainly do not want to see another 40 years of inaction,” Mr O’Loughlin said.
At Forestville, Kaufland was planning a $34 million two-storey supermarket, while about half the land was to be sold for residential use.
Kaufland, which operates 1200 stores in Europe, previously shelved a proposed $24 million outlet in Munno Para.
Master Builders Association SA chief executive Ian Markos said that the move would leave a hole in the local construction industry.