There’s a fair degree of interest in Kaufland at the moment, thanks largely to its impending arrival in the Australian market. Foreign entrants Aldi and Costco have already caused a fair degree of havoc in what was a cosy duopolistic market shared by Coles and Woolworths and the surprise news over Kaufland’s planed store openings has created no small measure of intrigue.

The surprise factor is that the clever money was on Kaufland’s discount sibling Lidl looking to add Australia to its global empire, but instead the trail will be blazed by Kaufland with its compact hypermarket concept. The retailer notes that its entry is still at the feasibility study stage, although local press reports note that sites have been secured in Melbourne and Adelaide, recruitment is well underway and that former Metcash and Woolworths exec Mark Hewlett has been appointed as COO.

Already a powerhouse with over 1,200 stores in Germany, the Czech Republic, Poland, Bulgaria, Croatia, Romania and Slovakia, Kaufland’s move into Australia will be fascinating to watch as it will be a unique concept in the market. With its focus on efficiency, private label and low prices it will provide yet another stern test to the two big incumbents already destabilised by the mercurial success of Aldi and Costco.

It is not harsh to suggest that Kaufland used to be something of an ugly duckling, very utilitarian stores filled with high shelves awash with garish red and yellow POS proclaiming price reductions. This was fair enough in a way: the lack of visual appeal a valid trade off in exchange for a tightly curated range and compellingly low prices.

Over the last year or so, though, Kaufland has embarked on a refurb programme across all of its European markets in an endeavour to make its stores easier and more enjoyable places to shop. I recently had the pleasure of visiting a remodelled store in Warsaw and was pleasantly surprised by the massive improvements in look and feel and navigability.

The produce department wouldn’t exactly be described as beautiful with its deployment of copious crates, but it still did the job in terms of range and pricing and was improved by the introduction of differentiated lighting. A food-to-go section sitting alongside was a decent attempt to better cater for a broader range of shopper missions.

Navigability across the whole store was enhanced through the use of bold overhead signage and icons and, while the shelves were still rudimentary in style and crammed with shelf-ready packaging, they were lower than before and relatively free of POS which lead to a smoother and less cluttered shopper journey.

There were plenty of nods to local sourcing across most categories and I was pretty impressed by the improved proposition of the service counters – meat, cheese and deli proving particular highlights. Private label, as ever, was extensive and underscored the value proposition of Kaufland by creating very often hefty price differentials with the A-brands alongside.

There was much less clutter in the shape of branded shippers and pallets than I was used to seeing in a typical Kaufland and the non-food range seemed much sharper than in stores yet to receive a makeover.

It would be hard to say with any sincerity that Kaufland has transitioned from ugly duckling to graceful swan, but I feel confident in stating that the new concept is a huge improvement on what went before. If stores such as this are a harbinger of what to expect in Australia, then I would be more than slightly unsettled as a competitor. Kaufland will be bringing ultra-competitive prices in a store environment that that actually pretty good these days. Let battle commence…

Bryan Roberts, Global Insights Director

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