Kaufland is coming: German supermarket giant reveals first three Melbourne sites

How Kaufland will look – an artist’s impression of one of its supermarkets.

Global German supermarket chain Kaufland will unleash a $500 million assault on the nation’s leading supermarket giants, Woolworths, Coles and Aldi, after winning planning approval for its first three supermarkets and a new distribution centre in Victoria.

Kaufland Australia managing director Julia Kern announced the three maiden stores in Melbourne and the construction of a distribution centre, which will be a vital link in its supply chain as it spreads its supermarkets through Australia.

With its arrival in Victoria, Kaufland is laying down a challenge to the heavyweights in Australia’s $90 billion grocery sector, and is the latest foreign retailer to wash up on our shores following a spate of other overseas food chains such as Costco and fashion outlets like H&M, Zara and Uniqlo.

Kaufland, which has more than 1230 stores in Europe, plans its supermarkets to be selling a wide range of products across many categories, including fresh food, packaged groceries, general merchandise, clothing, toys, homewares and hardware. Unlike an Aldi store its fresh food aisles will include deli service and a much larger range of meat and seafood.

“Kaufland will be a one-stop destination supermarket,” a Kaufland spokeswoman says. “Our aim is to showcase the best of Australian produce, alongside the best international products, supported by the private label range of a discount supermarket, all at a price point that is accessible to everyone.”

Planning approval for Kaufland’s move was announced at a press conference on Friday with Victorian Treasurer Tim Pallas at Mickleham in outer Melbourne, the proposed site of its state-of-the-art distribution centre.

Kaufland’s distribution centre is at Merrifield Business Park, where it has purchased a 28ha site on which it has plans to construct a 110,000sqm purpose-built distribution centre that will service its stores.

It will distribute goods to Kaufland’s new supermarkets, the first of which will be at Chirnside Park, Dandenong and Epping. The next three stores, currently going through planning approval, are in Mornington, Oakleigh and Coolaroo.

Kaufland German supermarket Australia Aldi

German supermarket chain Kaufland is set to take Australia by storm.

“Kaufland is committed to long-term investment both in Victoria and across Australia,” said Ms Kern, who is just 29 and will run Kaufland’s burgeoning operations in Australia.

“The development and approval of our first three stores, our distribution centre and our proposed future headquarters in Victoria will result in the creation of up to 1600 Victorian jobs.

“Our initial investment of $459 million will create opportunities for local businesses and stimulate much needed competition and consumer choice in Australia’s supermarket sector.

Kern says she is looking forward to opening more Kaufland stores in Victoria in due course.

“Our aim is to provide all Australians with more service and choice, highlighted by our principles of simplicity, quality, variety and price,” she says.

“Kaufland is delighted to call Australia our new home. We are committed and looking forward to partnering with local businesses and the wider community to ensure we create the best outcome possible.”

During the planning process a number of groups and companies lodged protests to Kaufland’s accelerated approval. They included independent supermarkets and shopping centre landlords with centres near the proposed Kaufland stores, including Vicinity Centres, the ISPT fund and Queensland Investment Corporation.

Kern says the initial investment of over $459 million showed Kaufland’s long-term commitment to Victoria and across Australia.

Kaufland is owned by parent company Schwarz Group, which is the fourth biggest retailer in the world. It will be very different to existing small-format supermarkets. It is run out of large warehouses of up to 4000sqm, with as many as 60,000 products across a wide range of categories.

Morgan Stanley estimates that 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 $3 billion from 56 stores within six years of its first store opening.

This article originally appeared on www.theaustralian.com.au/property.