Aussie supermarkets far from saturation

Aussie supermarkets far from saturationAustralia’s supermarket landscape is set to evolve to accommodate the entry and aggressive expansion of offshore discount grocery retailers, a new CBRE Viewpoint report has revealed.CBRE’s researchers argue that the traditional dominance of Coles and Woolworths, which held a market share of around 75 per cent at their peak, is being challenged by the entry of discount supermarkets Aldi and Costco. Aldi has rolled out more than 360 stores nationally over the last 15 years, gaining 10 per cent of total market share. The chain has plans to open a further 1 stores over the next five years, with a strong focus on Western and South Australia. Costco has also expanded with seven warehouses nationally since its entry into Australia in 2009. Australia has 10 supermarkets for every 100,000 people, compared with 16.7 stores in the United Kingdom and 11.7 stores in the United States. CBRE Research predicts Australia can accommodate a supply of 40 stores per year over the next five years before reaching the same store provision in per capita terms to the US supermarket sector. Around 60 to 70 supermarkets have opened each year over the past 15 years, with a large proportion of these situated in the eastern states. The increased presence of supermarkets in CBDs will further be supported by the significant supply of residential apartments in Australia’s major CBDs over the next five years.CBRE’s head of retail brokerage leasing in Australia, Leif Olson, argues that supermarket supply should increase in CBD areas, as smaller store sizes allow for higher productivity than those in shopping centres. In 2014, productivity in niche CBD supermarkets was 32 per cent higher than regional and sub-regional shopping centres, and 37 per cent higher than in neighbourhood centres.