None of you may have heard of Kaufland before, but we wouldn’t blame you either because it’s big in places like Bulgaria and other eastern European countries. The big supermarket chain has announced that it is coming to Australia, its first English speaking country to date.
Kaufland stores are different to those of Aldi because they are usually 20,000 square meters in size, that’s 15 times larger than Aldi and five times larger than a big Coles or Woolworths. The large discount store is known for cheap money saving deals and discounts, holding roughly 40,000 items compared to Aldi’s 1,300 different products.
Kaufland is not like a deja-vu of Aldi hitting our shores, because Aldi had a proven track record before reaching Australia, with success across the UK, Europe and America. Kaufland differs itself by not only selling own brands, but by selling branded products too. Let’s take a look at Kaufland in Germany last week for example: it had Ferrero Rocher chocolates, Samsung TV’s, Coca Cola and Absolut Vodka on special offer.
The chains products span beyond food too, with their eastern European stores holding stock from ladders and kettles to modern smartphones and more. If we were to give it an Australian similarity, it would be closer to Costco but without the membership, hopefully meaning more discounts and money saving opportunities for the masses.
Unlike Aldi, which had a proven business model before reaching Australia, Kaufland does not and nobody knows yet why management have chosen our country as its first English speaking market.
Kaufland began in West Germany in the 1980s where it currently operates 1,230 stores and has expanded into former communist countries such as; the Czech Republic, Poland, Bulgaria, Croatia, Romania and Slovakia. The chain experienced great success in these countries, but still to this day Kaufland has not attempted to enter Austria, France, Switzerland or the UK. Perhaps it has chosen Australia because our duopoly dominated Coles and Woolworths marketplace reminds it of the Soviet era.
Kauf in German means ‘purchase’ and true to German nature the store means business, because the chain isn’t flirting with the idea of entering the Australian market like Lidl or Amazon. Kaufland has already taken steps to get its doors opening in Australian as soon as possible by opening an office in the Kings Technology Park in South Melbourne. Visit their Australian website and you will see that you can already apply for jobs. They want to hear from property developers, administrative assistants and architectural planners, albeit German speaking would be preferred.
The Schwarz Group, also known as the fourth largest retail group in the world with US$ 94.5 billion in retail sales in 2015, owns Kaufland as well as Lidl. Our thoughts are that perhaps the group could be opening its larger stores to reach economies of scale so that it may later launch Lidl with cheaper prices than Aldi later down the line.
Ultimately, this could mean trouble for Coles and Woolworths, because now they face opposition from both Aldi on the cheap discounted own brand product ranges and from the larger Kaufland offering a really wide range of branded items. This is great news for customers across Australia because we are entering a time of more competition, which can only mean more money saving and discounted bargains within our grocery shops. I believe we may be about to experience a time similar to the battle we witnessed between Bunnings and Masters.