Kaufland sets its sights on Queensland

German retail giant Kaufland is powering ahead with its Australian expansion, with its latest store planned for Toowoomba in southern Queensland.

Kaufland Australia submitted a development application on Friday to Toowoomba Regional Council for a 4,000 sqm full-service supermarket on the corner of Anzac Avenue and Carrel Drive at Harristown, located southwest of Toowoomba city centre.

“German retailer Kaufland is making its first foray into the Toowoomba region,” a spokesperson for Kaufland Australia told Inside FMCG on Tuesday.

“The proposed development at 353-359 Anzac Avenue will have a strong focus on fresh food, as well as local produce, known brands and a high-quality private label range.”

The retailer said its “customer centric model” is driven by “simplicity, quality, variety and price” and aims to increase choice, provide a premium level of service and promote fair competition throughout the state and the rest of Australia.

Up to now, Kaufland which is owned by the fourth largest retailer in the world, Schwarz Group, has been focusing its efforts on Victoria and South Australia.

Retail expert Professor Gary Mortimer suspects the retailer is already in negotiations with more councils and real estate developers in New South Wales and Queensland but is keeping its cards close to its chest until sites are approved so as not to invite competition from other retailers.

“Kaufland is very strong on price. It’s Aldi on steroids,” Mortimer told Inside FMCG.

“Unlike Aldi, Kaufland will have a bigger range of national and global brands, as well as good range of own brand products.”

Mortimer doesn’t believe smaller retailers like IGA and Foodworks, who have previously voiced concern about the retailer’s entry into the market, are under threat but says “discount department stores like Kmart, Big W and Target” will suffer.

“For incumbent retailers – supermarkets and discount department stores – it will present a challenge,” Mortimer told Inside FMCG.

Kaufland Meat section

While no decision has been made on the application yet, it’s clear that the retailer’s expansion plans are gaining momentum.

In March, Kaufland Australia received planning approval for its first three stores in Victoria at Chirnside Park, Dandenong and Epping as well as its Melbourne headquarters and Australia’s largest distribution centre to be located at Mickleham.

The following month, the retailer was granted development approval to build its first South Australian store in Prospect, an inner northern suburb of greater Adelaide.

Kaufland Frozen section

Mortimer was positive about the impact the new store could have on the area.

“I think it’s great for Toowoomba. It will create jobs not just in store, but during the building process,” he said.

The retailer told Inside FMCG it is committed to “long term, sustainable investment in the Toowoomba region” and will continue to partner with all stakeholders and the wider community to ensure “the best outcome possible”.

In March, the retailer revealed an initial investment of $450 million into the Australian project. It is expected the retailer will open its first stores in 2021.

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