NO FEARS FOR ALDI AS KAUFLAND MOVES IN

ALDI Australia chief executive Tom Daunt is not intimidated by the looming arrival of German retailer Kaufland, saying traditional Australian supermarkets like 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 36,000sq m 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 a cross between a traditional Australian supermarket and Costco,” he said.

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

In contrast Aldi stores have about 1,500 items and are spread over about 1000sq m.

“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.