KAUFLAND NOT A PROB­LEM FOR ALDI

The Daily Telegraph (Sydney) - - DT/TV - ED­WARD BOYD EXCLUSIVE

ALDI Aus­tralia chief ex­ec­u­tive Tom Daunt is not in­tim­i­dated by the loom­ing ar­rival of Ger­man re­tailer Kaufland, say­ing tra­di­tional Aussie su­per­mar­kets such as Coles and Wool­worths will be more ex­posed.

Mr Daunt wel­comes Kaufland’s en­try into the Aus­tralian mar­ket and be­lieves it will boost com­pe­ti­tion in the $90 bil­lion sec­tor, which in turn will be a win for cus­tomers hunt­ing for cheaper prices.

Gi­ant gro­cery chain Kaufland has $88.4 mil­lion in cap­i­tal ded­i­cated to es­tab­lish­ing its pres­ence in Aus­tralia and re­cently forked out $25 mil­lion to buy a 36,000sqm ware­house site on the out­skirts of Ade­laide.

Mr Daunt said Kaufland, which is part of the Sch­warz Group — the fourth largest re­tailer in the world which also owns dis­count su­per­mar­ket chain Lidl — was not a big threat to Aldi due to the dif­fer­ences in prod­uct range and floor size.

“They have a very large for­mat so our busi­ness mod­els are ac­tu­ally quite dif­fer­ent … I would call them sim­i­lar to be a cross be­tween a tra­di­tional Aus­tralian su­per­mar­ket and a Costco,” Mr Daunt told The Daily Tele­graph.

Kaufland stores tend to stock up to 60,000 items and are spread out over 20,000sqm.

In con­trast Aldi stores have about 1500 items and are spread over about 1000sqm.

“They are a large for­mat and they do have a large prod­uct range, so I think more tra­di­tional su­per­mar­kets could be more ex­posed,” Mr Daunt said.

“I have read re­ports that they have pur­chased their first site in Ade­laide, I think it will take quite a while for them to get up and run­ning.”

Kaufland is re­port­edly scop­ing sites in Syd­ney and Mel­bourne and is in the process of com­pil­ing its Aus­tralian man­age­ment ranks.

The ar­rival of the large for­mat re­tailer, along with the pend­ing ar­rival of Ama­zon and the grow­ing strength of Aldi’s 500 stores, will put fur­ther pres­sure on Coles, Wool­worths and IGA su­per­mar­kets.

Mr Daunt said ad­di­tional com­pe­ti­tion was a win for con­sumers.

“Any­thing that brings more com­pe­ti­tion to the mar­ket and more choice is good for con­sumers, and that’s the busi­ness that we are in — which is try­ing to save money for cus­tomers,” he said.

Mr Daunt added that the cur­rent un­cer­tain eco­nomic and po­lit­i­cal en­vi­ron­ment — char­ac­terised by ris­ing elec­tric­ity prices, low wage growth and the fed­eral cit­i­zen­ship snafu — was ac­tu­ally work­ing to the ben­e­fit of Aldi.

“If you com­bine what is go­ing on eco­nom­i­cally and you com­bine what is go­ing on po­lit­i­cally, I think gen­er­ally con­sumers are a lit­tle pes­simistic,” Mr Daunt said.

“When peo­ple feel un­cer­tain about what’s hap­pen­ing, they are def­i­nitely in­ter­ested in ex­plor­ing more value op­tions …

“So we are a ben­e­fi­ciary of what’s go­ing on more gen­er­ally.”

(Kaufland) are a large for­mat and they do have a large prod­uct range, so I think more tra­di­tional su­per­mar­kets could be more ex­posed Tom Daunt Aldi CEO

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