Global chain Aldi is advancing into WA’s retail market with plans to open a discount supermarket on Albany Highway in Cannington.
The Metro Central Joint Development Assessment Panel on Thursday approved a planning application for the retailer to redevelop the showroom site at 1383 Albany Highway to make way for an 1800sqm Aldi supermarket and two smaller tenancies.
Currently home to an Impressions Furniture showroom, the site will place Aldi across the road from Westfield Carousel, one of WA’s biggest shopping centres, and next to the City of Canning's planned new city centre.
The privately owned German retailer has been in the market for supermarket sites and bought the four Albany Highway lots that will make up the 6693sqm site for the new store in 2011 for $2.8 million.
Aldi is developing a warehouse and distribution centre on a 13.5ha site at Jandakot Airport that will anchor the network of about 70 stores the group plans to open in WA.
The distribution centre should be completed in 2016, subject to approvals.
Aldi is expected to establish its WA supermarkets using a combination of leased and purchased sites.
Lease Equity managing director Jim Tsagalis said buying some sites would give the new arrival the certainty needed to start its store rollout.
“Aldi is opening into a very competitive market and when they do open, they will need an element of critical mass and that will require them to open a minimum number of stores from the outset to ensure they get the volumes they need to be viable,” he said.
“From a retail perspective they are a very healthy addition to the retail landscape and offer a significant point of difference in that they sell non-branded, high-quality goods.”
Mr Tsagalis said it was unlikely that Aldi would compete with existing supermarkets for locations.
“Aldi won't necessarily be competing head-to-head with Coles for space but it's more likely to be an addition to what we already have,” he said. “Groupings of Coles Woolworths and Aldi won't be uncommon but unlike the others, Aldi is happy to be in a carpark on its own.”
Aldi has about 320 stores in the Eastern States and has over taken JB Hi-Fi, Target, Kmart and Big W to become Australia's seventh largest retailer with estimated sales of $5 billion, according to Inside Retail Magazine.
Along with its presence in the retail real estate market, Mr Tsagalis said Aldi would also make a significant impact on WA’s supermarket landscape.
“Aldi is very much a value proposition and when we look at shopping centres, we like them because they don't bring in the same customer as a Coles, Woolworths or IGA do and, while competitive, they can also be complimentary by driving customers to a centre.”
“Aldi's customers will permeate beyond (the usual3km to 4km radius) because it offers a value proposition.”
JDAP chairman Charles Johnson said plans for the Aldi store were supported by the City of Canning.