MGA begs government to protect small businesses from Kaufland

May 7, 2019
By Alana House

MGA Independent Retailers has slammed plans for a Kaufland hypermarket on the Mornington Peninsula.

The organisation, which represents grocery, liquor and hardware retailers, has told The Mornington Peninsula News that a recent economic impact assessment had found that Kaufland’s potential effect on local businesses will be “permanent and ongoing”.

SGS Consulting conducted the assessment into the impact of proposed supermarkets in Oakleigh South, Mornington and Coolaroo.

MGA head Jos De Bruin (below) said the assessment confirms “the worst fears of local small and family businesses” in Mornington Peninsula Shire.

Jos De Bruin

“Kaufland will reduce footfall in existing local shopping centres which will reduce the quality, range and competition these hard-working small retailers can provide, or even their overall viability,” he said.

“If Kaufland is allowed to open in Mornington we are giving a multi-million dollar gift to a foreign multinational, and potentially reducing choice for locals.”

De Bruin said the state government should “fight for the survival of local businesses, not turn its back on them in favour of foreign multinationals who will obliterate local economies”.

Kaufland has plans for six stores in Victoria, including the Nepean Highway site in Mornington, which is close to other supermarkets, including two Coles supermarkets, a Woolworths, ALDI, Foodworks and several other smaller boutique grocers.

Kaufland liquor sales predicted

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

Kaufland liquor department.

“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.

State planning minister Richard Wynne has set aside the normal council planning processes for the German retailer’s Victorian applications and has given approval authority to an advisory committee.

The hypermarket’s spokesperson Didem Brennan said it was “committed to working with local communities in an honest, transparent and fair way”.

“Kaufland plans to add value to the growing grocery market, and we would be grateful to participate in the Mornington community through the creation of jobs, opportunity and ongoing investment,” he noted.

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