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Kaufland to exit Australia

German supermarket giant Kaufland are set to exit Australia.

The retail giant, who are the world’s fourth largest, made the shock announcement yesterday.

The company employ 200 Australians and had purchased multiple properties in the gear up to their launch – which included plans to open at least 20 stores, initially across Victoria, South Australia and Queensland. The first of these had been due to open this year.

They had also begun construction on a $255 million distribution centre in Victoria, which was to be one of the biggest in Australia.

Speaking on Kaufland’s plans in August, Victoria’s minister for economic development Tim Pallas said the retailer’s investment in the state could “top half a billion” and create 2,400 jobs – should they be granted approval for all proposed stores.

Adding at the time that Kaufland had already engaged with local suppliers.

Kaufland did not provide a reason for their abrupt withdrawal, other than to cite a desire to focus more on their European markets where they operate 1,300 stores and employ close to 132,000 people.

Just months ago Kaufland Australia director Maximilian Wiedmann said the company viewed Australia as a strong market, stating: “Australia is one of the fastest growing regions in the world, and we are excited to grow with it.”

However Kaufland International’s acting CEO Frank Schumann issued a very different message yesterday, stating they would make an “orderly” withdrawal from the market.

Mr Schumann said the decision was based on the need to focus on their European business, rather than as a reaction to the Australian market and thanked the government for being “open minded” to their plans.

“This was not an easy decision for us. We always felt welcome in Australia. We would like to thank our employees and we apologise for the disruption this decision will cause,” he said.

“In Europe, we see a great deal of growth potential. We will actively shape the consolidation of the European retail sector, thus further reinforcing our leading position.”

Not surprisingly shares for would-be rivals Coles and Woolworths surged following the news, with both up by more than 3% at the close of ASX on Wednesday.

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