Kaufland may open in Australia within the next 12 months

Posted by Jack Cain on 30th April 2018

Earlier this year German discount supermarket Kaufland were advertising for employees in key positions. The advertisement on the Kaufland website offered positions for personnel in property development, architectural planning management, building services engineer’s and head of business intelligence roles.

Since acquiring land in South Australia at the Le Cornu site on Anzac Highway in Forestville, on the fringe of the Adelaide CBD. The Kaufland website is advertising jobs in fashion buying, homeware buying and a future leadership position.

Having already gained former Woolworths and Metcash executive Mark Hewlett as chief operating officer, the likelihood executives from general merchandisers like Big W and Kmart will be looked in to is very likely

Australian Food News contacted Kaufland for a confirmation date of opening to which they responded with-

“We are currently not in a position to comment or make any detailed statements“

Kaufland in Australia

Morgan Stanley analysts compiled a report around the growth of what will happen when Kaufland does open in Australia which featured in the Australian newspaper.

The report predicts many as 300 stores could open in Australia.

Keys to their success

According to the report Kaufland operates around five different formats in Europe that span from 20,000sqm (a similar size to the format it initially intends to roll out in Australia), but also operates stores as small as 3000sqm (the size of a typical Coles/Woolworths store).

Market outlook

“Based on our understanding of the market and on precedents we estimate that Kaufland may be targeting opening seven to 10 stores when it ‘launches’ in Australia in either late 2019 or early 2020. It is possible that Kaufland has taken options to buy other sites that it will execute on over the coming 12 months,” the Morgan Stanley researchers wrote.

“The very low cost of debt financing, especially in Europe, means that, in our view, Kaufland is likely to have a very low cost of capital and thus lower required rate of return hurdles vs its listed competitors. Discounters and especially those that are privately owned tend to have very long investment horizons which means they have a greater tolerance for initial losses,” the report said.

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