Aldi’s hypermarket rival looking at Aussie entry

Kaufland signIn news that conspicuously flew under the radar in July, a company named Kaufland Warenhandel GmbH & Co. KG has filed a trademark application for a large list of products, goods and services in Australia.

Kaufland just so happens to operate food retail outlets in hypermarket formats across Europe and is part of the Schwarz Group, which also owns supermarket chain Lidl.

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The trademark is listed as index approved, and covers a bumper list of goods, including foodstuffs, luxury foods, alcoholic and non-alcoholic beverages, health food shop articles, drugstore products, cosmetics, perfumery, medicines, household articles and services such as restaurants and lodging, catering, travel agencies and many more.

Kaufland hypermarket chains saw rapid growth between 2010-2015 in Eastern and Western Europe, on the back of rampant consumer demand for its low-price, high-quality offer. It is now looking to push into uncharted territory, with openings in the US, Russia and Australia.

The hypermarket concept essentially combines a department store with a supermarket as demonstrated in Australia by the Super Kmart stores of the 1980s, which were abandoned after consumers didn’t take to the hybrid of Kmart and Coles concept.

Speaking to Inside Retail Weekly, Brittain Ladd, a former consultant with Deloitte and a global retail expert, said the failure of the Super Kmart hypermarket was not necessarily an indication the concept won’t work locally.

“Australia’s retail landscape is growing in scope and size as consumers are demanding and embracing choice,” he said. “I see no reason why hypermarkets won’t succeed in Australia and must also point out that the Schwarz Group is one of the best companies at understanding consumer and retail trends and if they choose to launch Kaufland stores in Australia, the odds of success are high.”

Kaufland picWhen asked if major names Coles or Woolworths would be alarmed by the entrance of another discount chain, Ladd pointed to information detailed in his reports, The Lidl Deception and A Beautiful way to Save Woolworths, that Australia’s retail landscape is transitioning to discounters.

“The success of Aldi proves I’m correct,” he said. “If Kaufland stores are opened, they will introduce lower prices on many of the products Australians now purchase from Coles, Woolworths, Target, Big W and Target.

“Wesfarmers would be wise to take the arrival of Kaufland seriously as the game theory analysis I performed identified hypermarkets as a retail model that Wesfarmers would be challenged to compete against.”

However, Ladd added that Wesfarmers possesses a “very capable team of executives so retailers who enter Australia will always find Wesfarmers’ brands capable of competing”.

Ladd noted that the Schwarz Group is an incredibly well-run organisation with an executive team “second to none” and a reputation for making “exceptionally wise decisions” when it comes to its brands.

“In regards to Australia, I expect that there will be a hybrid model utilised to enter the continent whereby a combination of brands and formats are introduced. I continue to believe the Lidl logo will appear in Australia and the possibility of Kaufland stores appearing is certainly a possibility.”

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1 comment

  1. Michael Baker posted on November 18, 2016

    In a country of 25 million, I don't see how you can have Woolworths, Coles and IGA at their current sizes plus an expanding Aldi and Costco and then Kaufland/Lidl on any kind of scale. Something has to give, possibly one of the first three being replaced. I am a little surprised about entering with a hypermarket model though. I'd have thought a more compact format was desirable. The hypermarket/supercenter model is a devil of a thing to roll out in a place like Australia. But totally agree with the person quoted in the article who says that the failure of Coles/Kmart shouldn't be taken as a sign that hypermarkets won't work in Australia. Coles just made a hash of it.

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