German “hypermarket” chain Kaufland is ramping up its search for executives to lead its Australian operations, in a move retail experts say looks more and more like the giant is set to set up shop in local markets this year.
Kaufland’s Australian website currently displays a number of job advertisements for high-level positions within the corporate structure, just months after the retail giant began recruiting for property development roles.
There are currently eight advertised vacancies on the website, including ads for senior heads of marketing and purchasing, store planners and junior buyers, all of which are to be based in Melbourne. The German grocery giant currently operates 1230 stores in Europe and employs over 150,000 workers.
The move into Australia has been a long time coming, with Kaufland parent company Schwarz Group registering for a local trademark on the word ‘Kaufland’ in November 2016. The company also conducted a feasibility study in 2016 to determine if the brand would be viable in Australia.
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In March 2017, Kaufland declared it is “coming to Australia’ and by October, had bought a 36,000 square metre site in Adelaide for $25 million. This was followed in November by the purchase of a former Bunnings site in Dandenong in Victoria for $16.4 million.
The Kaufland website currently states the retailer has an “ambitious Australian investment and development programme” and is looking for more real estate to purchase.
Kaufland’s ‘hypermarket’ format offers a wide variety of products from groceries to homewares, and sells its goods in large surface area layout. It’s owner, the Schwarz Group, is one of the largest retailers in the world and also operates the Lidl chain of discount supermarkets.
As Kaufland appears to be ramping up its Australian operations, one of its key competitors in Australia, Aldi, has recently revealed plans to expand further this year by opening 32 news stores in New South Wales, Queensland, Victoria, Western Australia and South Australia, according to Inside Retail. Aldi currently has over 500 stores nationwide but operates in much smaller format stores.
Kaufland’s entry could put pressure on Aldi
Dr Gary Mortimer, retail expert and associate professor at Queensland University of Technology’s school of business, says Aldi’s prominence in Australia has offered a window of opportunity for Schwarz Group to enter the market.
Mortimer believes by introducing shoppers to the German discount store format, Aldi has made the future landing of Kaufland easier for shoppers to get used to. He predicts the German chain will launch this year.
“[Schwarz Group has] observed the growth of Aldi and they’ve allowed Aldi to condition Australian shoppers to a German discount food model,” Mortimer says.
“Aldi has had that low-cost food discount market to themselves for the last fifteen to sixteen years, and now they’d been genuinely worried about their major competitor entering the market.”
But unlike Aldi, Mortimer says we won’t be seeing nearly as many Kaufland stores popping up as there are Aldi stores.
“I imagine they’ll do a Costco model with half a dozen Kauflands operating. But once Kaufland has sucessfully established distribution centres, logistics and locations across the eastern seaboard and South Australia, I think we’ll see a Lidl brand start to emerge.”
Schwarz Group also quietly trademarked branding for sister store Lidl in 2016. Lidl is a smaller scale grocery chain that offers a smaller range of products for shoppers. Mortimer believes it won’t be too long before Australian shoppers start to see Lidl stores enter the market.
“I think we would probably expect to see Schwarz look at launching Lidl probably in the next twelve to eighteen months,” he says.
SmartCompany has contacted Kaufland’s Australian office for comment.