‘The new Aldi’ is coming: Kaufland snaps up second Aussie site in Melbourne

GET set for cheaper grocery bills because German supermarket heavyweight Kaufland is expanding quickly.

GERMAN supermarket giant Kaufland has just scored it’s second Australian site as the chain prepares to break into the lucrative grocery market.

The Daily Telegraph has revealed that the Schwarz Group, who own Kaufland, have just snapped up a former Bunnings site in Dandenong, Melbourne for $16.4 million.

Early last month, the company spent $25 million on their first Australian site in Adelaide.

Queensland University of Technology retail expert Gary Mortimer said he expected Kaufland’s expansion Down Under to lead to further supermarket price wars in the years to come — meaning the average Aussie could look forward to cheaper grocery bills and a greater range of products in the near future.

“Kaufland bought a site a few months ago in South Australia and just yesterday it was announced that Dandenong in Victoria would be their next site,” he said.

“What I saw from seek.com.au a few months back was that they were recruiting for business development managers for Melbourne, Sydney and Brisbane, so that tends to indicate those will be the next three markets they will enter.

“Kaufland is owned by the Schwarz Group which is much bigger than Aldi. They own Kaufland which is a hypermarket-style business, which is a combination of a large supermarket and a large discount department store much like Kmart.

“The other brand they own is Lidl, so the Schwarz Group has over the last three to four years slowly trademarked the Lidl and Kaufland brands here in Australia.”

Mr Mortimer said Aldi had paved the way for Kaufland to bring the German supermarket model to Australian shores.

“They’re in the position where they could enter the market once Aldi had conditioned shoppers to the German food store model. Since Aldi has legitimised private label products here in Australia, the Australian shopper now understands what German food retailers look like and it will certainly enable Kaufland to expand a lot easier into the market,” he said.

“I think once they have established their sites in Australia over the next few years I think they will launch the Lidl model, and if we look at the UK market we’ve got five supermarkets and two discounters in Aldi and Lidl, so it’s not unreasonable to think the market here in Australia can sustain two or three major supermarkets in Coles, Woolworths and IGA as well as two discounters in Lidl and Aldi, and then the hypermarkets like Kaufland and Costco.”

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

The chain already has more than 1230 stores in Europe.

Kaufland Australia has already 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.