Coles, which initially wanted to buy nine supermarkets from family-owned Supabarn, is going ahead with the acquisition of five stores in New South Wales and the ACT after the deal was approved by the ACCC (Australian Competition and Consumer Commission) today.
The Wesfarmers-owned supermarket in June last year originally proposed to buy nine supermarkets from Supabarn. But the deal was restructured after the ACCC expressed concerns that the acquisition would be likely to substantially lessen competition.
Supabarn, which started in Canberra in 1991, bills itself as independent with a mission to offer the freshest local produce.
“We received vocal feedback from members of the public that Supabarn is competitive and has a differentiated offer from that of the other major supermarket chains,” says ACCC chairman Rod Sims said. “This was borne out by our own analysis.”
Coles will now buy stores in Canberra Centre, Kaleen and Wanniassa in the ACT, and Five Dock and Sutherland in NSW from the Koundouris family which built Supabarn into a large independent supermarket chain.
A sales price hasn’t been announced.
Supabarn is retaining stores at Crace and development sites in Casey and Kingston in the ACT and Annandale, Gymea and Sans Souci in New South Wales.
There are also four independently owned stores which operate under the SupaExpress banner.
Coles and its main rival Woolworths have been under pressure from small players and new entrants including the German group Aldi. However, Coles is still achieving growth. At its latest half year result, Coles reported a 6% rise in food and liquor sales to $937 million.
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