ms the Kaufland superstores will be the death knell of many smaller supermarkets. Kaufland has secured the former Le Cornu site on the Anzac Highway in Forrestville, Adelaide, but it has also developed an appetite for Victoria, where it is locating its national headquarters in Oakleigh South. It is pursuing rezoning opportunities in Mornington, Dandenong, Epping, Oakleigh South, Chirnside Park and Coolaroo. With a state election campaign in full swing in Victoria, Planning Minister Richard Wynne has called in the rezoning proposals for assessment by an advisory panel, overriding local municipal councils. The MGA and independent supermarkets are up in arms about the minister’s decision, believing the state government will give less consideration to local market circumstances. The Metcash retailers and the MGA are arguing to the planning panel that they are not opposed to new retail competition but that new market entrants should locate within areas already zoned for retail uses. The campaign, dubbed “Save our Shops”, is arguing that allowing Kaufland to open megastores in markets that are already very competitive will force the closure of independent stores. Also, it claims the rezoning panels appointed by the minister will not assess the economic impact on other retailers of the proposed new stores, nor will they pay proper attention to local community needs. All of Kaufland’s nominated sites will be assessed on land-use planning criteria. Kaufland has recently acquired a former Bunnings Warehouse site in Dandenong in Melbourne’s southeastern suburbs, which would conform with such planning criteria. But the retailer’s hypermart model does not fit in most of the existing retail-zoned properties. Kaufland’s store footprint is up to 20,000sqm and requires parking for up to 300 cars. For Metcash and the MGA, the stakes are high in the battle to curb Kaufland as the grocery market tightens. Sales revenue for Metcash for the 2018 financial year fell 1.2 per cent and is likely to decline further next year when a supply contract with a key South Australian customer, Drakes Supermarkets, ends. The wholesaler faces intense competition as the demerged Coles is floated as an independent entity on the Australian Stock Exchange by Wesfarmers and from the counter-strategies to that move by Woolworths, Aldi, Costco and, potentially, online grocery vendors. Independent supermarkets are the most vulnerable to the rollout of Kaufland hypermarts, squeezing profits and margins over and above any fall in sales and customer traffic levels. Kaufland is one of the retail brands of the German company Schwarz Group, which is the fourth-largest retailer in the world with more than 1200 hypermarts in Europe. Schwarz Group also owns and operates Handelshof cash-andcarry outlets, which have a range of 80,000 products, and the Lidl discount supermarket chain, which has more than 10,000 stores across 28 countries in Europe and the US. The optimum Kaufland hypermart model is larger than the Costco format and stocks more than 60,000 products. Kaufland Australia is cashed up and is certain to secure rezoning approvals for at least some of its identified sites in Melbourne, increasing competition in the grocery market and making business tougher for independent retailers and for Metcash.