Kaufland Tops Up War Chest CE & Appliance Brands Set To Benefit
Distributors and European brands who already supply Aldi with consumer electronics and appliances are now lining up to supply new entrant Kaufland who recently injected another $145 million of capital into their Australian operation which is now capitalised at $323M, the Company has more than 1,200 stores in Europe.
Kaufland, the sister chain of German discounter Lidl, is believed to have secured almost a dozen store sites in Victoria, South Australia, NSW and Queensland according to the Financial Review and has established a new head office in Melbourne, on the site of a former Bunnings store, to complement state offices in Brisbane, Sydney and Adelaide.
“This capital increase reflects the importance and long-term commitment to our expansion,” a Kaufland spokeswoman said recently. “It marks our continual investment in Australia both now and for the future, through the creation of jobs, competition and opportunity.”
The Company is set to mirror the Aldi model selling food and groceries along with consumer electronics and appliances specials as well as sporting goods, stationery, garden products and hardware.
The Master Grocers Association, which represents independent retailers such as IGA and Foodworks, is opposed to Kaufland’s accelerated development plans, saying the company was overriding local decision-making processes by seeking state government intervention to mass rezone land in Melbourne.
The MGA has launched a Save Our Shops campaign, saying the foreign-owned company plans to “drop massive mega malls on communities without giving them a say”.
Analysts are claiming that the arrival of Kaufland will put pressure on established retailers and that they could become Australia’s fourth largest food and grocery chain.
The chain is also set to compete up against Betta Electrical, Bing Lee and smaller electrical and appliance retailers. Several suppliers to the chain have told ChannelNews that the Company will sell TV’s and sound gear as well as small appliances.
We have also been told that some suppliers who have exclusive contracts to supply Aldi are setting up separate Companies and will source goods from separate manufacturers for Kaufland.
According to Morgan Stanley reports last year, Kaufland was expected to open between seven and 10 stores in the first year and eight stores a year over the next five years – moving into sites vacated by Bunnings, Masters, Target and Big W – taking its footprint to 48 and lifting sales to $2.8 billion by 2025.
Based on its market penetration in Europe, where Kaufland has more than 1266 stores, Morgan Stanley believes there is scope for between 133 and 295 Kaufland stores in Australia.
Kaufland sells fresh food and packaged groceries as well as clothing and footwear, electronics, homewares, sporting goods, stationery, garden products and hardware. supplied
Kaufland has snared at least one site vacated by Masters, and the Bunnings Warehouse Trust is believed to have sold several properties to the company according to the Financial Review.