Australia’s next international supermarket Kaufland embarks on hiring spree ahead of launch

Global hypermarket Kaufland is preparing to take its next step in the lead up to its Australian expansion by recruiting a raft of managers and other staff in Melbourne, Adelaide and Brisbane.

The German-based company, owned by the world’s fourth largest retailer, Schwarz Group, is searching for area, warehouse, distribution and facility managers in Melbourne, as well as other administrative staff, such as an IT team leader and payroll coordinator.

It comes as the retailer, known for its large format ‘hypermarket’ formats, prepares for launch Down Under, having already secured sites in South Australia and Victoria.

Kaufland’s ad for an area manager in Victoria reveals the business has big plans for Australia, with the successful candidate expected to recruit, manage and develop up to 600 store team members.

A raft of buying roles are also advertised across the dairy; flower and plants; health, baby beauty; and produce categories.

More senior roles, including new area managers in Brisbane and Adelaide, will be expected to travel to Europe for 14 months for training and development.

More than 30 roles are being sought all together, in what a spokesperson told The Australian, is the “next phase” of the company’s local ambitions.

“The recent recruitment drive is a testament to our commitment to attracting and retaining high calibre talent who are looking to grow and fast-track their careers with Kaufland Australia,” the spokesperson said. 

A “destination retailer”

Kaufland is expected to disrupt Australia’s already highly competitive supermarket space and put further pressure on independent fresh food providers in the coming years.

The business already has more than 1,200 locations in Europe, generally in a large 3,000-4,000 square metre format.

Morgan Stanley analysts published a report earlier this year warning the retailer could generate up to $480 million in Australian revenue by the 2020 financial year with just eight stores.

Morgan Stanley believes Kaufland will invest heavily in fresh food, which could put further pressure on already thin margins in those categories by prompting the likes of Coles, Woolworths and Aldi to also drop their prices.

“Kaufland prioritises fresh food so as it rolls out and Aldi completes its fresh based renewal program, fresh food market share gains will be more difficult,” the analysts said in their April report.

Independent fresh food retailers are already under the pump, following years of sustained market share loss to Coles and Woolworths, particularly in the fresh meat category.

Earlier this month Victoria’s largest independent butcher appointed voluntary administrators amid the difficult market conditions.

The entry of Kaufland is also seen by analysts as a precursor for parent Schwarz Group to consider bringing its other supermarket chain, Lidl, to Australia.

Lidl is known in Europe as Aldi’s rival, often following it into international markets where consumers have developed an appetite for discount grocery chains.

This, according to Morgan Stanley analysts, will have a broader impact on the industry moving forward.

“As discounters gain share industry sales growth will remain low and prospects for considerable margin expansion are unlikely,” the analysts said.

But retail expert Dr Gary Mortimer, an associate professor at QUT Business School, believes independent retailers will be the most insulated from the impact of Kaufland’s entry, while the likes of Costco and Aldi will suffer the most.

“Kaufland will represent a destination retailer, a larger format store shoppers will visit to do the bulk of their shopping, not necessarily a drop-in and ‘top-up’ shop, so independent fresh food retailers, like fruiters, bakeries and butcheries should not be impacted significantly,” Mortimer told SmartCompany.

Mortimer advises independents to focus on depth of local products, expert food knowledge and advice, as well as community engagement — a point of difference to Kaufland, which he says will be strictly “price centric”.

SmartCompany contacted Kaufland but did not receive a response prior to publication.

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