I have posted here why there is barriers to entry into Australia based on the Lidl/Kaufland experience:
While there is a lower number of supermarkets in Australia than many other countries/regions (which have a significantly greater population and lower density than Australia), IBISWorld notes in its 2014-2019 analysis of trends that in Australia “The Supermarkets and Grocery Stores industry is one of the most fiercely competitive industries in Australia.” For a new entrant to enter the market is very challenging and expensive to gain market share, often for little return.
There is also a risk that new entrants could also reduce competition from the independent grocers/fruit and vege/butchers/bakers sector as any growth strategy to ensure profitability will be to maximise the gain of customers from existing retailers. Currently independents are struggling and reducing their existing customer base is the last thing they need. The later is often forgotten when discussing the sector in Australia and is a major concern to the independents.
