German supermarket, Kaufland quits Australia

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In a move that shocked Australian state governments and industry, German supermarket giant, Kaufland, has scrapped plans to open a string of stores in Australia.

Kaufland had planned to open up to 20 stores starting in Adelaide and Melbourne, but management made the surprise announcement on Wednesday that it would not proceed in Australia to concentrate on its European markets.

Kaufland International acting chief executive Frank Schurmann said in a statement that it was not an easy decision, adding: “We would like to thank our employees and we apologise for the disruption this decision will cause.”

Kaufland, owned by the 170-billion-Australian-dollar (116-billion-U.S.-dollar) retailer Schwartz Group, had invested more than 500 million Australian dollars on property, staff and distribution points in Australia, but gave no reason for its sudden decision to abandon the expansion plans.

In September, Kaufland was joined by Australian political leaders to turn the first sod on building its first Adelaide store, scheduled to open in 2021.

The company’s 200 Australian employees were told of the decision on Wednesday and were in a state of shock, the Australian Financial Review reported.

“It’s too raw,” one senior executive told the newspaper.

The company ran recruiting advertisements as recently as Friday, and its Australian website still promoted its ambitious venture on Wednesday.