The shop that flopped: How highly-anticipated discount supermarket Kaufland blew $277MILLION without opening a single store in Australia
- Discount supermarket chain Kaufland failed to open a single store in Australia
- The German retailer announced plans to enter the Australian market in 2017
- Over twenty sites were purchased and building began on a distribution centre
- The retailer announced its shock exit from the Australian market in January
- Kaufland Australia was revealed to have made losses of $277.7 million last year
German supermarket chain Kaufland blew nearly $280million in its bid to set up a rival to Coles and Woolworths in Australia, despite failing to ever open a store.
The cut-price chain had plans to build a network of supermarkets across the country, before announcing its shock withdrawal from Australia in January.
Its latest set of accounts show the brand lost $277.7million after tax last year, after being $25.8million in the red the year before, the Financial Review reported.
Discount supermarket chain Kaufland (pictured in Poland) withdrew from opening stores in Australia after purchasing several properties and lost almost $280 million in the last year
Kaufland purchased more than 20 store sites across Victoria, South Australia, NSW and Queensland (Kaufland building site at Prospect in Adelaide pictured in September 2019)
The retailer (design sketch pictured) was expected to prompt price competition between nation-wide industry leaders Coles and Woolworths
Kaufland, owned by the Schwartz Group, purchased its first store site in 2017 after claiming it had an 'ambitious Australian investment and development program'.
The retailer bought plots of land across Victoria, South Australia, New South Wales and Queensland before starting work on a $460million distribution centre in suburban Melbourne.
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It wrote down the value of its properties and cited a $116.5million impairment charge as its biggest loss.
The company also spent $52.4million on employee expenses and $82million in 'other' costs.
The accounts also showed Kaufland had cash on hand of $150million and $119million worth of assets held for sale, taking total assets to $295million.
The company reported total liabilities of $80million and net assets of $215million. The company had also committed $135million to construction contracts.
Directors said the value of certain assets, such as properties, may have been impacted by the coronavirus pandemic since the accounts were signed off in April.
Kaufland, whose launch date was pushed back to 2021 from 2019, said 200 employees would be affected by its withdrawal from Australia.
About 2,400 jobs were forecast to be created by the launch of nine new stores in Victoria and Queensland this year.
Frank Schumann, acting CEO of Kaufland International, apologised to employees for the 'disruption this decision will cause'.
'This was not an easy decision for us. We always felt welcome in Australia,' he said in a statement.
Kaufland Australia managing director Julia Kern resigned in April and returned to Germany while chief operating officer Mark Hewlett returned to the UK.
Kaufland has roughly 1,300 stores across Germany, Poland, the Czech Republic, Romania, Slovakia, Bulgaria, Croatia, and Moldova.
Daily Mail Australia has contacted Kaufland and the Schwartz Group for comment.
The company suffered $52.4 million in employee costs and $62 million in losses relating to abandoned projects (Kaufland building site in Adelaide pictured in September 2019)
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