The Changing Supermarket Landscape and Coming Of Kaufland To Australia

The Changing Supermarket Landscape and Coming Of Kaufland To Australia

Australia’s Domestic supermarket explains the ‘always-on’ competition within and beyond the industry while the online shopping platform remains dominant in this competitive landscape.

The Australian market for grocery, dairy, electronics and other consumer discretionary products is primarily led by giant supermarket players including Coles, Woolworths, Amazon Australia and now the new German entrant Kaufland.

In the quest for securing the maximum market share, all these companies have been actively performing to bring innovation and attract customers through special offers and discounts. Like Coles very famous ‘Little Shop Campaign’ helped the retailer to beat its closest competitor in sales.

We can also see that the recently launched new category of Pantry Foods and Drinks by Amazon Australia has built price pressure on its peers to sustain their market position. And to keep counting, Woolworths decision to introduce price-cuts in the food domain has been another significant move in maintaining the intensity of the competition.

The bright side of the story explains the superior quality goods offered to Aussies and that too at the most attractive prices.

In this fast-moving landscape, a German supermarket company, Kaufland, makes an entry in Australia. Kaufland is a German supermarket company which is wholly owned by the Schwarz Group. It operates in seven countries across Europe.

Last week, Kaufland secured the approval for its Australia launch. Its headquarter for Melbourne and development across three sites in Victoria has been approved.

Kaufland operates as a full-service supermarket with a wide range of products aimed to serve the everyday needs of consumers while its price category range from premium to budget. It seems difficult for existing players to avoid the entry of Kaufland which is positioned as the fourth largest retailer of the world.

Kaufland stated that with the headquarter in Melbourne and state offices in Sydney, Brisbane,  and Adelaide, the company is well positioned to establish and grow its business in Australia. It aims to offer a significant range of competitively priced grocery, fresh and non-food items through physical stores.

Currently, Kaufland has received the consent to establish three stores and a distribution centre in Victoria while few more remains pending for approval. In the second round of development, Kaufland plans to open around 30 stores across Australia, which represents a mere 4% of market share, told an Australian media company.

Since the market share of Kaufland is expected to remain at low-single digit, the coming of German branded supermarket does not seem to disrupt the presence of big-fat supermarket chains like Coles and Woolworths.

The stock movement outlines that the entry of Kaufland has not made any impact on the investors of Coles and Woolworths. COL and WOW are currently trading at $11.370 and $30.230  on 15 March 2019 (As at 2:50 PM AEST).


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