Kaufland exits Australia

Kaufland exits Australia

24 January 2020

German hypermarket Kaufland, which is owned by the world’s fourth largest retailer, Schwarz Group says it will make an “orderly withdrawal” from the Australian market to focus on its European operations, despite more than half a billion in investment in its local stores.

Kaufland has stated that the decision was made “after careful and thorough consideration.”

The company will be concentrating its business on its European core markets in the foreseeable future.

Kaufland’s 200 Australian employees were informed of the decision today, with an assurance that generous packages including all entitlements will be offered, as part of a thorough support and consultation process for all.

The future of Kaufland’s existing Australian investments, including properties purchased for retail outlets and distribution infrastructure, will be discussed with the relevant parties in coming days.

According to Kaufland, this decision is about focusing business activities in Europe and is in no way a reflection of the efforts of our local employees or management, or the support Kaufland has received from the Australian business community or governments.

Frank Schumann, acting CEO of Kaufland International, said “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.

“We would also like to thank our business partners, who offered us great support over the last few years. We would also like to thank the government for being very open-minded to our projects.

“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.”

In June last year the German supermarket also celebrated the construction start of its new $255 million distribution centre in Mickleham, in Melbourne’s north.

The state-of-the-art 117,000 square metre facility was expected to generate 600 jobs in the area and was being built by Vaughan constructions on land purchased from private developer MAB Corporation.

MAB chief operating officers David Hall said he was “gobsmacked” by the news when contacted by The Age and The Sydney Morning Herald.

“We don’t know anything about it and we need to have a conversation with them. We’ve been trying to get hold of them on the phone.”

Kaufland purchased the large 28-hectare site in the MAB’s Merrifield Business Park for its distribution centre in March last year and was due to settle on the full transaction within a few weeks.

The future of Kaufland’s existing Australian investments, which include almost 20 sites slated for stores and distribution centres, will be discussed with relevant parties in coming days.

Kaufland is currently operating in Germany, Poland, the Czech Republic, Romania, Slovakia, Bulgaria, Croatia, and the Republic of Moldova with roughly 1300 stores and 132,000 employees.