German supermarket Kaufland has pulled out of Australia despite intentions to launch 20 stores

The nation’s biggest supermarkets can breathe a little easier after German supermarket Kaufland announced its intentions to leave Australia.

The fourth biggest retailer in the world came to Australia less than six months ago with a plan to flip Aussie supermarkets on their heads, but today announced it would pull the pin before opening a single store.

The German chain announced an intention to withdraw from the Australian market, where it planned to open dozen of retail locations, to focus on its European business.

The shock decision will leave 200 Australian employees in limbo and a number of planned locations across the country abandoned.

Kaufland says the fate of its existing Australian properties, which it purchased for retail outlets and distribution, will be discussed in the near future.

“This decision is about focusing business activities in Europe and is in no way a reflection of the efforts of our local employees or management, or the support Kaufland has received from the Australian business community or governments,” the company said in a statement.

Kaufland currently operates in European markets including Germany, Poland and the Czech Republic, employing more than 132,000 people.

How the fruits and vegetable section could have looked.

Kaufland International acting CEO Frank Schumann issued an apology for the disruption.

“We always felt welcome in Australia. We would like to thank our employees and we apologise for the disruption this decision will cause,” he said.

Mr Schumann said while the decision was not an easy one to make, the chain had to focus on its traditional market.

“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,” he said.

INITIAL PLANS

Just last year Kaufland announced its aggressive expansion plan for Australia.

In September, it confirmed it had lodged paperwork for nine sites in Victoria, including in Oakleigh South, Coolaroo, Epping, Dandenong and Chirnside Park.

It also had earmarked locations in South Australia with a national network of 20 stores before it had even announced a NSW expansion.

At the time Kaufland Australia managing director Julia Kern said the company was committed to basing its Aussie headquarters in Victoria and would tip half a billion dollars into the state.

“We are committed to long term, sustainable investment in Victoria and we are delighted to be exploring opportunities in both metropolitan and regional communities,” she said.

CONTINUED RETAIL WOES

The announcement comes hot on the heels of a slew of high-profile Australian businesses that have folded in the first fortnight of 2020.

It started early on January 7 when it was revealed department store Harris Scarfe was set to shut 21 stores across five states over the course of just one month after the retailer was placed in receivership in December.

Just days later, McWilliam’s Wines — the country’s sixth-largest wine company that has been run by the same family for more than 140 years — announced it had also appointed voluntary administrators.

Then it was popular video game chain EB Games’ turn, with the business confirming it was closing at least 19 stores across the country within weeks, while fashion chain Bardot is also planning to shutter 58 stores across the nation by March.

EB Games will close at least 19 Aussie stores. Picture: AAP Image/Matt Loxton

In January it also emerged Curious Planet – the educational retailer previously known as Australian Geographic, which is owned by parent company Co-op Bookshop – would pull 63 stores across Australia after failing to find a buyer for the brand, while denim chain Jeanswest entered voluntary administration that month and tech giant Bose also revealed it would close all Australian stores and 119 across the globe largely as a result of the rise of online shopping.

The total confirmed number of bricks-and-mortar stores earmarked for closure has already risen to 161 this year alone.

2020s dismal first fortnight for retail follows a horror 2019 that brought the collapse of a slew of Aussie businesses, with some international players also folding in recent months.

Last January, menswear retailer Ed Harry went into voluntary administration, and a week later, Aussie sportswear favourite Skins also revealed it was on the brink of failure after applying for bankruptcy in a Swiss court.

At the end of the month, the Napoleon Perdis beauty empire announced the cult make-up chain’s 56 Aussie stores had closed for stocktake. Administrators were appointed, and scores of stores have since collapsed.

Footwear trailblazer Shoes of Prey also met its demise in March last year along with British fashion giant Karen Millen, which in September revealed it would soon shut all Aussie stores, leaving around 80 jobs in peril.

While 21 Harris Scarfe department stores will shutter. Picture: Brendan Radke

In October, celebrity chef Shannon Bennett’s Melbourne burger chain Benny Burger was also placed into administration, followed by seven Red Rooster outlets in Queensland just days later and then Aussie activewear sensation Stylerunner, which has since been sold to Accent Group Limited.

In November, it was revealed that popular furniture and homewares company Zanui was in trouble after it abruptly entered voluntary administration, leaving angry customers in the lurch.

Later that month, Muscle Coach, a leading fitness company, was put into voluntary administration after a director received a devastating diagnosis and the company racked up debts of almost $1 million.

Then it was the famous Criniti’s restaurant chain’s turn to enter into voluntary administration, with several of the 13 sites across the country set to close for good. It was closely followed by discount legend Dimmeys.