A new low-cost supermarket is about to break into Australia’s lucrative grocery market creating an all out price war.
German chain Kaufland has already bought up two building sites in South Australia and Victoria, and is now beginning a high-level recruitment drive.
Kauflands emergence on the market will create an vicious price war, with the cost of groceries falling by over 10 per cent, 9News reported.
Kaufland, the low-cost supermarket is about to break into the Australian market
The German chain has already bought up two building sites in South Australia and Victoria
The low-cost chain is preparing to take on competitors Coles, Woolworths and Aldi and also discount retailers, such as Kmart, JB Hi Fi and Harvey Norman.
Kaufland owns almost 1,300 supermarkets across Europe and in every place it has launched an intense competition between outlets has followed.
Research from Holland has found that every time Kaufland enters a new market where discount competitor Aldi has stores, prices fell by 8.2 percent.
But Australian analysts are saying the price war could cause groceries to fall by over 10 per cent.
‘Aldi has owned the low-cost food and grocery market, certainly for the last 15 years. But I think all of that is about to change,’ Dr Gary Mortimer, from the QUT Business School, said.
Aldi typically stocks around 1500 items per store, whereas Coles and Woolworths can stock up to 25,000. Putting these numbers to shame, a regular sized Kaufland store will stock 60,000 different products.
From groceries to televisions and other electronics, the low-price chain is like an Aldi, Kmart and JB Hi-Fi all in one.
Not only can it out-stock its cheaper rival Aldi, the chain also promises to have enough of its weekly specials in stock to meet demand.
Kaufland owns almost 1,300 supermarkets across Europe and in every place it has launched an intense competition between outlets has followed
Australian analysts are saying the price war could cause groceries to fall by over 10 per cent
Aldi recently came under fire for having a limited amount of stock on the specials it advertises.
‘So, shoppers lining up for hours only to miss out on those weekly specials,’ Dr Mortimer said.
‘When Kaufland arrives, those weekly specials will be available all through the week – and it won’t be limited volumes.’
While the savings will be great for consumers experts are also warning the launch of the German chain could result in big job loses and have a devastating impact on IGA, Foodworks and independent grocers.
Job adverts for their management training have been posted in the ACT, Adelaide, Perth, Darwin, Sydney and Brisbane.
Kaufland has developed a global cult following for its advertising campaigns.
In 2015 they launched a Star Wars themed Christmas ad which featured two children who are united after a chance meeting at the supermarket.