#134 Kaufland enters Aussieland

Late in 2017, German chain Kaufland, part of the German-based Schwartz Group that also owns retailer Lidl, entered the Australian AUS$ 90 billion market for groceries. It brought its brand of huge, warehouse style stores that usually have 15,000 to 20,000 square meters and a range of up to 60,000 different products to Aidelaide first and then to Melbourne. At this point, it remains to be seen if the Schwartz Group, which is the fourth largest retail group globally, can pull this off. In an industry where margins are very thin and competition is intense, getting to scale quickly matters most. Challenges will lie ahead as Kaufland’s model differs significantly from established Australian retail chains such as Coles or Woolworths. Their stores are generally less than a fifth of Kaufland’s size, and as other retailers such as Wal-Mart or Carrefour have experienced, entering distant markets with a standardized business model is a complex matter.


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