Kaufland receives planning approval for first Aussie stores

German hypermarket Kaufland has announced it will build Australia's largest distribution centre in the northern suburbs of Melbourne.

The centre will service the first three Kaufland stores in the country. It will be situated on a 28-hectare site on the Hume Highway in the Merrifield Business Park and, according to The Australian Financial Review, is "substantially larger than state-of-the-art warehouses being developed or recently opened by Coles, Woolworths and Amazon, all of which are investing billions to optimise their supply chains".

"Our new state-of-the-art distribution centre at Merrifield Business Park will be the company's single-biggest investment in Australia and enable Kaufland's expansion," a Kaufland spokesman said. "Merrifield was selected for its strategic location and ability to cater for future expansion of the facility."

The $450 million distribution centre will feature extensive temperature-controlled storage and the latest automated warehousing with 40-metre-high bay storage and a 3600-square-metre office.

According to The Sydney Morning Herald, the announcement of the centre "will send shivers through the country’s fiercely competitive $90 billion grocery sector".

The company received planning approval for its first three stores, in Victoria at Chirnside Park, Dandenong and Epping, last week. The Chirnside Park site is next to a Dan Murphy’s liquor outlet.

An independent advisory panel gave the go-ahead despite numerous objections.

A ‘Save Our Shops’ campaign run by local small businesses in Victoria - including IGA, FoodWorks and Friendly Grocer - has claimed that Kaufland will “destroy” them.

In response, the Kaufland spokeswoman said the company was “committed to working with local communities in an honest, transparent and fair way”.

“When the market grows, so will we, and so will our competitors," she noted. "When a new player enters the retail market, it encourages everyone to raise the bar in terms of quality, service and choice.”

Kaufland Australia managing director Julia Kern celebrated the planning approval news with Treasurer of Victoria and Minister for Economic Development, Tim Pallas (above).

"It all adds up to $459 million of investment, more jobs and more choice for Victorian shoppers," Pallas said. "Add that to the basket."

Kern thanked the Victorian Government and everyone who participated in the independent Advisory Panel process. She said the initial investment would create up to 1600 jobs and "stimulate much needed competition and consumer choice in Australia's supermarket sector".

Kaufland supermarkets will have a total store area of 4000 square metres and will feature local, regional and international products at discount pricing. Each store will include a bakery, butcher and liquor areas.

“Kaufland will be a one-stop destination supermarket," Kaufland said in a statement. "Our aim is to provide all Australians with more service and choice, highlighted by our principles of simplicity, quality, variety and price.”

“Kaufland is delighted to call Australia our new home. We look forward to continuing our commitment to partner with local businesses and the wider community to ensure we create the best outcome possible.

“Being customer centric is at the heart of all that we do – driven by our values of Performance, Dynamics and Fairness, we aim to increase choice, provide high quality service and promote fair competition to ensure that the customer is always the winner.”