German hypermarket chain Kaufland, which, like Lidl, is part of the Schwarz Gruppe, is stowing away its plans to enter the Australian market. The retailer wants to concentrate on its European core markets.
"Not an easy decision”
The decision comes unexpectedly: Kaufland was already quite advanced with its conquest plan in Australia. The retailer employed some 200 people there and had started building a 117,000 square metre automated distribution centre. Some 22 stores were already under construction. What needs to be done with these investments will become clear in the coming weeks.
“This was not an easy decision for us. We always felt welcome in Australia,” Frank Schumann, acting CEO of Kaufland International, said in a statement. “We would like to thank our employees and we apologise for the disruption this decision will cause.” He assures that the employees will receive “generous packages including all entitlements”.
Analysts have been very sceptical from the start about the retailer's ambitions in Australia. That market is dominated by local players Coles and Woolworths, with Aldi as a major challenger since 2001. Consumer confidence is low there and consumption has fallen even further since the major forest fires.
Kaufland claims to see greater growth potential in Europe, where it wants to play a decisive role in the further consolidation of the sector. The retailer operates in Germany, Poland, the Czech Republic, Romania, Slovakia, Bulgaria, Croatia and Moldova.