German discount supermarket Kaufland beefs-up recruitment drive ahead of local launch

KAUFLAND is coming. And when it does, Aussie shoppers are set to hit the jackpot with plummeting grocery prices across the country.

KAUFLAND is preparing to mount its attack on Australia’s supermarket giants — and shoppers are set to benefit.

The German discount supermarket heavyweight has launched a high-level recruitment drive ahead of its launch into the Australian market.

The chain’s owners, the Schwarz Group, have already purchased a former Bunnings site in Dandenong, Melbourne for $16.4 million and in 2017 the company paid $25 million for a sprawling 3.6ha Adelaide property.

Kaufland has reportedly been looking for more sites in Queensland, and 11 Australian positions have been advertised on job site seek.com.au, including a “future leader program” which would see successful applicants spend nine months in Germany for a training course.

Senior executives from local retailers have already been poached, with former Metcash and Woolworths executive Mark Hewlett confirmed as chief operating officer.

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While an official opening date has not been revealed, retail experts are expecting Kaufland’s arrival Down Under to trigger a grocery war.

Retail expert Brian Walker from the Retail Doctor Group said Kaufland’s hypermarket model would offer a new experience for consumers and that he expected the chain to expand very rapidly in Australia.

Experts expect Kaufland to expand rapidly in Australia. Picture: Alamy

“It’s very unlikely we’ll see anything less than 20 to 50 stores within the next five years — their only challenge will be finding locations,” he said.

“Kaufland needs to be price attractive and range attractive and they need scale to be really worrying to the larger players — and that’s exactly what they will do.

“It will be different for shoppers because of sheer range, the pricing will be very strong, and Kaufland will be a real combination of Kmart and Aldi.”

Retail analyst Geoff Dart, of DGC Advisory, said he didn’t believe the Australian market was large enough to support another major supermarket player alongside Coles, Woolworths, Aldi and IGA — and that shoppers would be the winners when the supermarket chains started to feel the squeeze.

“I don’t know if there’s room for another discount supermarket other than Aldi in our market. There’s not enough room for all of them in my opinion,” he said.

“In my opinion, Kaufland will do what Aldi did when it started by being very circumspect about where to build stores.”

Kaufland hypermarkets found overseas can be as large as 20,000 sqm. Picture: iStock

He expected Kaufland to aggressively lower its prices in the years to come, and that consumers in areas with a higher number of supermarkets would benefit the most.

“Supermarket groups are very measured and they are long-term players so I don’t think they will be expecting to make money in the first five years,” he said.

“Pricing in supermarkets depends on the amount of competition in the region — we tend to see higher prices in areas where there is not much competition.

“Consumers are going to get, in my view, more consistently lower prices. Now prices are very ad hoc.”

Mr Dart said he believed Woolworths and Aldi would not be seriously impacted by Kaufland’s launch but that Metcash, IGA’s parent company, would be the hardest hit, followed by Coles.

“Woolies have done a great job making good investments to bring customers back. But Coles has shot itself in the foot by adding to their fuel prices, which means their fuel vouchers are now worthless,” he said.

Kaufland Australia has received more than $88 million from its German parent company.

“The big guys will sort themselves out but the first bit of collateral damage will be Metcash and the second will be Coles, unless they develop a value proposition other than price.”

The Schwarz Group is the fourth-biggest retailer in the world, and it is famous for its sprawling shops and huge variety of goods, selling up to 60,000 products in each store.

The chain already has more than 1230 locations in Europe.

Kaufland Australia has received more than $88 million from its German parent company, and its website says it has “an ambitious Australian investment and development program”.

Kaufland hypermarkets found overseas can be as large as 20,000sq m, which is close to four times the size of small Coles and Woolworths supermarkets in Australia.

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