Kaufland buys third Queensland site

August 20, 2019
By Alana House

Kaufland Australia has confirmed the purchase of its third Queensland site, in Morayfield, north of Brisbane.

A Kaufland spokeswoman told the Courier Mail: “We are committed to long term, sustainable investment in Queensland, and we are delighted to be looking at all sites and opportunities that are available.”

“We look forward to continuing to work together with Moreton Bay Regional Council and all key stakeholders with the goal to deliver high quality, great service and amazing value to the wider region.”

The property is next to Morayfield Regional Shopping Centre, which houses Coles, Woolworths, Target, Kmart and an ALDI store, putting Kaufland in direct competition with some of Australia’s biggest FMCG players.

Senior strategist with Retail Oasis Jessica Sinclair told The New Daily that ALDI should be the most nervous in the short term.

“I definitely see that initially ALDI customers are the most ripe for poaching because they are more price-conscious, and they have shown themselves to be more willing to try something new and experience something different,” Ms Sinclair said.

“And I think this German offering of no-frills value would definitely appeal to that Aldi shopper, that value-oriented part of the market.”

IBISWorld senior industry analyst Tom Youl agreed.

“ALDI and Costco have targeted the cost-conscious consumer,” he explained. “Coles and Woolworths are traditional stores with existing brand value and more rusted-on shoppers. They’re positioned in a market that is slower to change.”

First Kaufland pub planned for Queensland

The company has already acquired sites in Toowoomba and at Burleigh Heads on the Gold Coast. It recently submitted an application to Toowoomba Regional Council to build the first Kaufland hotel and hypermarket in Queensland.

The development application notes it will comprise a “shopping centre including supermarket, speciality shops, food and drink outlet and a hotel”. The pub will be situated on the hypermarket site in a stand-alone location with provision for 80 car spaces.

Kaufland Australia
An artist’s impression of the Kaufland Toowoomba hypermarket development with freestanding hotel.

The application noted it would also have a limited range of associated speciality retail tenancies, a food and drink outlet and “a hotel use associated with an integrated grocery, food, hospitality and liquor offering”.

The development will operate between 6am and 10pm, seven days per week.

The inclusion of a pub is a result of Queensland liquor laws stipulating that to obtain a liquor licence for a bottle shop, the owner must already hold a commercial hotel licence for a pub within 10km.

In June, Kaufland Australia turned the first sod on its distribution centre in Mickleham, Victoria. When completed it will be Australia’s largest distribution centre.

Earlier this month Kaufland lodged plans for third store in South Australia. It’s also purchased three sites in Victoria.

Morgan Stanley estimates, based on Europe penetration, Australia could support as many as 295 Kaufland stores longer term and that its annual sales in Australia could hit more than $3billon from 56 stores within six years of its first store opening.

Kaufland liquor sales predicted

According to a report prepared by Anthony Dimasi, Managing Director, Dimasi & Co, for Kaufland Australia, the impact of its proposed Victorian store at Mornington on existing supermarket facilities within the trade area is estimated to be 5%-6%.

Kaufland catalogue
A European Kaufland catalogue

“The Kaufland store is estimated to achieve a market share of total retail expenditure across the main trade area which it is expected to serve ranging from 3% – 3.3%,” it said. “In food and groceries, the store is expected to achieve a market share of 5.5% – 6.1%, while in packaged liquor its estimated market share would fall within the range 5.7% – 6.3%. In all other retail categories the store’s market share will be minimal.”

“These impacts are highly likely to be experienced primarily by the two largest supermarket and grocery store chains in Australia – Woolworths and Coles. Both of these groups are very large, highly successful and very well placed to counter any competitive intensity that will result from
the entry of Kaufland into the Australian market.”

According to the report, the anticipated sales performance for each new Kaufland store in Australia is expected to fall within the range $40 – $50 million. Approximately 70% of store sales are expected to be in food and grocery items, with the remaining 30% comprising sales of non-food items, being around 20% of store sales in general merchandise items and around 10% in packaged liquor.

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