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European supermarket giant's plans for Adelaide

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Europe's largest supermarket retailer is preparing to open a network of stores across Adelaide - its first expansion outside Europe - and has been in negotiations with South Australian food suppliers to stock their products, InDaily can reveal.

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The first Kaufland store, to be built at the old Le Cornu site on Anzac Highway, was announced by a real estate agent in The Advertiser today.

InDaily can reveal that Kaufland is planning as many as a dozen stores in metropolitan Adelaide and is in negotiations with the State Government to establish a South Australian logistics centre to service the network which, alone, would provide up to 400 jobs.

Kaufland, which operates 1230 stores across Europe, has chosen Adelaide as the first site outside of Europe for its expansion.

The company’s huge stores – dubbed “hypermarkets” – offer a wider selection than the recently established Aldi chain in SA. Unlike Aldi, Kaulfand carries a wide variety of brands.

InDaily understands Kaufland representatives have been in discussions with local food suppliers in SA’s prime agricultural regions.

The head of Kaufland Stiftung and Co, part of the Schwarz Group – Europe’s largest supermarket retailer – will visit Adelaide later this month to finalise the purchase of a second local site. Schwarz, one of the biggest retailers in the world, also owns the discount supermarket chain Lidl.

 

State trade minister Martin Hamilton-Smith has also been in negotiations with Kaufland – meeting with CEO Patrick Kaudewitz at the company’s HQ in Neckarsulm, Germany, last month.

The state’s Investment Attraction Agency, which reports to Hamilton-Smith, has been involved in the deal to bring the company to SA, and the Government’s land management arm, Renewal SA, is working with the company to secure potential supermarket sites in the north-eastern, western and southern suburbs.

A spokesperson for Hamilton-Smith said the government had not offered a financial enticement to Kaufland – however that might be a possibility if it goes ahead with a logistics centre.

Inside a Kaufland store in Germany.

Kaufland’s Australian head, Gregor Thomas, confirmed that the group was looking to expand in SA beyond the first store on Anzac Highway.

“We are very pleased to have made our first acquisition in Australia,” he said in a statement.

“The (Le Cornu) site represents an excellent opportunity to bring the high quality Kaufland offering to Australian we look forward identifying other sites which fit our requirements. We are keen to continue to work with the South Australian Government on our exciting expansion, the first outside Europe for the group.”

Hamilton-Smith said the Kaufland decision to begin their global expansion in Adelaide “speaks volumes for their confidence to invest in this state”.

“What impresses me most about Kaufland is their commitment to local suppliers and producers; this opens so many opportunities for SA businesses as well as the chance to tap into their global supply chain,” he said.

Martin Hamilton-Smith (right) talking to MHS with Kaufland’s Executive Director (Real Estate) Jan Plambeck.

Hamilton-Smith said the construction of the store at the old Le Cornu site in Forestville would create 300 jobs.

Rather than unwanted competition, the minister argued it would create confidence in SA.

“It’s a major vote of confidence in the South Australian retail sector and will give local consumers even more choice,” he said.

However, the head of the South Australian Independent Retailers, Colin Shearing, warned that the new entrant would not lead to an increased retail spend in the state.

He told ABC Radio Adelaide the size of the retail “pie” would not increase, and that Kaufland would likely impact some of the bigger chain stores, such as Big W and K-Mart.

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