There are worries the pull-out of Kaufland from the Australian market will lead to a second eyesore Le Cornu site near the centre of Adelaide.
- Kaufland has announced it will no longer go ahead with opening stores in Australia
- There are worries two of its planned sites in Adelaide could become empty eyesores
- The economic slump and bushfires could be behind the move
The German supermarket giant Kaufland yesterday announced it was ditching its plans to open hypermarkets — combined supermarkets and discount department stores — across Australia, even before it opened its first store.
It won approval for its first Australian hypermarket at the site of the former Le Cornu furniture warehouse in the inner Adelaide suburb of Forestville in 2018.
Its half-built hypermarket on Churchill Road, Prospect, was going to be the first store to open.
Kaufland bought the land for its planned Forestville store in 2017 and had almost completely cleared the site.
The site of another former Le Cornu store in North Adelaide has been vacant since it closed in 1989.
Kaufland did not give a reason for its pull-out, apart from that it wanted to focus on Europe for the foreseeable future.
The chain has 200 staff in Australia, and had planned to employ thousands more.
It announced last November it planned to open about 20 stores in Australia, focusing on Victoria and South Australia.
It has more than 11,000 stores worldwide, including under its Lidl brand.
Worries about two Adelaide sites
Labor MP Jayne Stinson, who represents Forestville in State Parliament, said local residents were worried the Forestville site could end up like the former Le Cornu site at North Adelaide.
“The demolition job certainly isn’t complete and if you look at the site right now, basically there’s a whole heap of dust blowing around, there’s ruins and rubble, it’s certainly an eyesore and people are worried it’s going to leave a bit of a scar,” she said.
Premier Steven Marshall said a “large number” of investors would be interested in turning the Forestville site into a mixed-use development.
“We’re going to be doing everything we possibly can to sort of bounce back from this and look at those two very important sites,” Mr Marshall said.
Unley Mayor Michael Hewitson said he was confident the Forestville Le Cornu site would be redeveloped and would not be a white elephant.
The council had hoped the site would be redeveloped for apartments before Kaufland bought it.
“We see it as an opportunity — the asbestos is gone, it’s now a greenfield site,” Mr Hewitson said.
“There was a lot of interest in that site and it wasn’t just from Kaufland at the time.
“And they are sitting on the opportunity to sell it and hopefully they don’t hold onto it as empty space — and I don’t think they will.”
Prospect Mayor David O’Loughlin said the council would work hard to make something of the Churchill Road site, where Kaufland had already started building.
He said the council was shocked by the company’s decision after doing extensive negotiations on site planning.
“They have spent millions here and we’re really worried that this is just going to be abandoned and be an eyesore for years,” Mr O’Loughlin said.
“So we’re disappointed not just to lose Kaufland … but we’re losing the opportunity to make sure we can beautify this area of Churchill Road, which is sorely needed.”
Master Builders SA chief executive Ian Markos said he hoped contractors who had worked on the abandoned Kaufland sites in Adelaide would be paid, but he expected they would still suffer some financial loss.
“They can’t just walk off the site and leave it there,” he said.
“Particularly for the people who live around there, they don’t want a dustbowl just left there, so I reckon there’ll be people working to remediate the site [and to] make sure it’s in a good condition before they leave.”
Economy and bushfires could be behind pull-out
The Australian Retailers Association said the nation’s plummeting economy and current bushfires could be the reasons behind Kaufland’s withdrawal from Australia.
Executive director Russell Zimmerman said he had tried to contact the company as he was not sure of the reasons behind its departure.
“My best guess is with the closures that we’ve seen in Australia over the past few weeks, I wonder whether they see Australia being a much tougher market than they originally thought,” he said.
He speculated that the company is pulling out because of Australia’s economic slump, and the bushfires.
“I suspect if something like the fourth largest retailer in the world feels that Australia is not quite the right place or it’s not ready to put a Kaufland in, then I suspect we’re going to have a bit of difficulty trying to attract somebody else to Australia,” he said.
Adelaide City Council announced in 2017 it would buy the North Adelaide site from the Makris Group, with funding help from the State Government.
It has remained vacant since then.