How Kaufland's Toowoomba expansion will impact economy
WHILE the expansion of a European hypermarket chain into southeast Queensland could have a big impact on local home prices, existing local businesses may be on edge, an expert says.
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THE expansion of German hypermarket chain Kaufland into Toowoomba could have both positive and negative impacts on the city, a consumer psychology expert says.
University of Southern Queensland Associate Professor Jane Summers said while the impact of Kaufland on the Toowoomba or the Australian market wasn't yet known, because the chain is yet to open its first Australian store in Victoria, the Aldi or Costco model offered a glimpse at what the chain's impact would be.
"The deal with really huge multi-faceted retail proves they do have an impact on smaller retailers, because people are lured in by the shiny bright new thing," Professor Summers said.
"There is the potential some smaller retailers could struggle when a new venture comes in, as it draws traffic away."
The 6024sq store, located at 353-359 Anzac Avenue, will have an extensive range of local fresh food and groceries, and a range of non-food goods, potentially including items such as crockery and cutlery, cookware, small electrical appliances, napery and linen, some apparel, stationery, toys, as well as seasonal products and weekly promotional items.
She said this gave an opportunity to smaller retailers to develop and capitalise on their relationship with customers.
"The big retailers aren't going to know people's names, they won't remember what they bought last week, they can't offer special deals," she said.
"Smaller retailers need to start building on their ability to know their customers and making sure their environment is welcoming and attractive.
"You'll never be a sustainable business if you're operating on a price relationship will your customers, as someone will always come along and undercut you.
"You have to offer more to than a low price. Smaller retailers need to now get working hard to get closer to customers."
Professor Summers said there were several positive impacts the development would have on the city.
"There will be a lot of employment opportunities as they'll most likely need a lot of staff," she said.
"That side of town might develop much more quickly now too.
"People who own property around Drayton might find land values going up."
Professor Summers said Kaufland might have chosen Toowoomba as its first Queensland location because Toowoomba had a great local economy.
"It's a large regional centre that doesn't just draw on the population that lives here, people come in to shop here so there is a large catchment area potential," she said.
"There are also a number of Europeans who live here and travel here. Maybe they saw that and thought there was a lot of opportunity here.
"For years Australia only had Coles and Woolworths as the major players in the grocery sector. We've been seen as ripe for the picking from some of these large international retailers."
Originally published as How Kaufland's Toowoomba expansion will impact economy