Kaufland will cause more pain for IGA, Woolworths and Coles
A few days ago we commented about Kaufland opening their first stores in Australia. Today news.com.au reported comments from DGC Advisory that the Australian market wasn’t large enough to support another major supermarket player. On the surface, we couldn’t agree more, but DGC has made a mistake assuming that markets remain static. We have no doubt that Kaufland will carve out a solid slice of the Australian supermarket pie and the core questions will need to be redefined: for how long will IGA survive in its present form and how badly will Coles and Woolworths be hurt? Both chains have been trying to emulate Aldi, but that’s a pipe dream if your cost of doing business is 50% higher than your competition.