Kaufland targets Australia

German Schwarz Group is performing a feasibility study on Australia: not for its flagship chain Lidl, but to see whether it could possibly enter the local market with its discounter Kaufland.

Prepare local launch

Schwarz Group has major plans for its discount chain Kaufland: according to its Australian website, the chain is looking for a letting manager and is searching the nation for possible store locations, ranging from 15,000 to 20,000 sqm. The nation’s population spread is advantageous to Kaufland’s strategy, because a majority of Australians inhabit the five largest cities (Sydney, Melbourne, Brisbane, Perth and Adelaide) and two of those (Sydney and Melbourne) are even bigger than Berlin.

The German company has already struck a deal with the Australian Pharmacy Guild, to remove a possible obstacle in its Australian conquest. The latter feared Kaufland would become a major competitor in the pharmacy industry, but according to a spokesperson, it has now “entered into an agreement with the Australian Pharmacy Guild”.

The groundwork laid down by its competitor Aldi will also benefit Kaufland as it has shown that the duopoly, from the Woolworths and Coles chains, can be pierced. Both still dominate 60 % of the market, but Aldi has steadily grown to 5.6 % of the market. Kaufland now seems intent on its own share of the Australian market.