Aldi has enjoyed its challenger status against Woolies and Coles, but that could change with a new German player coming to town.
Kaufland is opening in Australia bringing a “one stop shop model” with it, the Australian Financial Review reported.
“Kaufland is a one-stop destination shop,” Kaufland Australia Managing Director Julia Kern told the AFR.
“It means that we offer the best of both worlds,” she added, referring to it being a supermarket that also offers general merchandise and a private label range.
According to the Sydney Morning Herald, Kaufland is a cross between a supermarket and a Kmart, bringing your favourite grocery items along with other items like bikes and maintenance supplies.
Professor Gary Mortimer from the Queensland University of Technology Business School summed it up by describing Kaufland as an “Aldi on steroids”, in a Nine News report.
Kaufland is headquartered in Melbourne, with offices in Sydney, Brisbane and Adelaide. Earlier this year it announced plans to build a giant $459 million warehouse in Melbourne, measuring 110,000 square meters, the Sydney Morning Herald reported.
Like Aldi, Kaufland also hails from Germany. It is a subsidiary of Schwarz Group – the fourth largest retailer in the world.
Since it was founded in 1984, it has grown to operate nearly 1,300 stores and employ around 150,000 workers in seven European countries.
The company plans to open 30 stores in Australia and has nearly 50 trademarks registered with IP Australia including logos and brand names, according to Nine News.
And like Aldi, Kaufland has brand names you’ve likely never heard of.
The brand names “Midorea” and “Bevola” cover products such as pharmaceuticals, hair care and cosmetics, while non-alcoholic beverages are under the brand name “Aparacino”, Nine News reported.
Kaufland also has other registered names with the letter K, such as K Organic, K Favourites and K Free, Nine reported. It is also set to sell a combination of Australian produce and cheap home brands.
The biggest difference between Aldi and Kaufland comes down to the sheer size. Kaufland stores are massive, typically measuring up to 20,000 square meters with 300 car spaces, according to the Sydney Morning Herald. That is about 15 times bigger than Aldi and five times bigger than a large Woolies or Coles, news.com.au reported.
Not only are Kaufland stores bigger – they also have much more stock.
While Aldi stocks around 1300 different items – most which are their own brands – Kaufland has around 30,000 products including fresh produce, meat, general merchandise, hardware, clothing and homewares, according to the AFR.
Aldi opened its first store in 1913 and now has more than 10,000 store locations around the world.
It opened its first store in Australia back in 2001 and now has more than 500 stores around the country, challenging the dominance of Coles and Woolworths.
“Over the first half of the past five-year period, the rapid expansion of ALDI significantly altered the [supermarket and grocery] industry’s operating landscape, with the popularity of its low-cost private-label products underpinning strong growth,” IBISWorld noted.
“ALDI’s rise forced the two established industry giants, Woolworths and Coles, to cut prices and expand their private-label product ranges in response.”
While Woolworths has retained its spot as Australia’s top grocery retailer, Roy Morgan research indicated an increase in Aldi’s marketshare. It said that Aldi “had a good year in 2018”, growing its market share by 0.5% to 11.4%.
With Kaufland’s entry, only time will tell which retailer will reign supreme.