Prominent Malaysian developer <a href="https://www.apartments.com.au/developers/osk-property">OSK Property</a> has unveiled <a href="https://www.apartments.com.au/new-apartments/aura-at-melbourne-square-7-hoff-boulevard-southbank-vic-3006">Aura</a>, the next stage of its $3.5 billion Melbourne Square precinct in Southbank, continuing its push into wellness-led, amenity-rich apartment living.

The $800 million tower, planned for 7 Hoff Boulevard, will rise 67 storeys and deliver 673 apartments, with COX Architecture drawing on both Japanese design principles and Australia’s natural landscape to shape the building’s identity. A rectangular grid aesthetic defines the building’s exterior, with COX drawing design cues from New York high-rises and Tokyo’s skyline.

Aura builds on a growing trend in high-density living, where wellness is no longer an add-on but central to the product. The development is structured around four key pillars, combining calm, minimalist residences with layered communal spaces, landscaped gardens, and a suite of wellness amenities designed to support both physical and mental wellbeing.

[smartcode_project:default project_id=151921 project_image_fid=367465]

At the core of the project is what OSK describes as a vertical wellness ecosystem, a multi-level approach to amenity that integrates health, lifestyle, and social spaces throughout the building rather than confining them to a single level.

The main resident hub, the Aura Club on level seven, will include a pool, cold plunge, spa, gym, Pilates and yoga studios, alongside more lifestyle-driven inclusions like a golf simulator, music rooms, library, and work-from-home spaces. Above, a series of higher-level amenity zones, including the Meridian Club and Cumulus Club, introduce more refined, social and retreat-style environments, with private dining, lounges, and premium wellness spaces positioned to take advantage of city views.

[smartcode_project:default project_id=151921 project_image_fid=367467]

The residences themselves will largely include balconies, a key design move in a market increasingly focused on natural light, airflow, and connection to the outdoors. Views will extend across the CBD, the Arts Precinct, Royal Botanic Gardens, and beyond.

Aura also introduces approximately 1,600 sqm of retail across the lower levels, further activating the Melbourne Square precinct, which already includes Kennedy Park, a Woolworths, childcare, and a growing mix of hospitality operators.

[smartcode_project:default project_id=151921 project_image_fid=367474]

“Aura stands tall as an exemplar of holistic wellness – its focus on social, physical and mental health culminate in a building that is calming, restorative and relaxing, where residents will have their own sanctuary within the well-connected and sought-after <a href="https://www.apartments.com.au/developments/southbank-vic-3006">Southbank</a>," says&nbsp;OSK Property CEO Chong Boon Woon.

“We have been very encouraged by the market’s response to the BLVD offering, and we know there is a strong demand for the level of amenity, service and design that the Melbourne Square precinct is known for.

“Complemented by work-from-home lounges for professionals, family friendly outdoor garden spaces, and state-of-the-art fitness and wellness facilities, Aura will continue our focus on maximising physical, emotional, and mental wellbeing,” he said.&nbsp;

[smartcode_project:default project_id=151921 project_image_fid=367475]

The project follows the strong performance of BLVD, which is now around 80 per cent sold, and reinforces OSK Property’s long-term commitment to Melbourne Square as a fully integrated, mixed-use precinct.

Construction is expected to commence in late 2026.

[smartcode_project_cta:default project_id=151921]

Joel Robinson

OSK unveils AURA, the latest stage in Southbank's $3.5 billion Melbourne Square precinct

National developer Time &amp; Place appears to have settled on a design for its long-anticipated Potts Point project.

After several years of back and forth with local council and the NSW Government, the developer, which has spent close to a decade targeting the former The Chimes site on Macleay Street, has now progressed its plans.

Following a concept design submission last year by SJB, Time &amp; Place has lodged a full State Significant Development Application with the NSW Government, this time for a scheme designed by Kerry Hill Architects.

<img alt="Time &amp; Place" data-entity-type="file" data-entity-uuid="504d2a27-d65f-4227-8189-1e35e3376e62" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-20%20at%209.38.24%E2%80%AFAM.png?VersionId=_XqFKATYHF30KnVByPxhaI9UBzmkmfn7" />

The 16-storey proposal includes 44 apartments, 21 of which will be build-to-sell. These will comprise 19 three-bedroom apartments and two four-bedroom penthouses.

More than 50 per cent of the development will be dedicated to affordable housing, with 23 one- and two-bedroom apartments delivered in line with the NSW Government’s Housing SEPP.

Kerry Hill Architects said the proposal is driven by a strong response to place.

“Our proposal for a new residential building for Potts Point in Sydney is driven by a deep consideration of place,” the practice said in its submission.

“This operates on multiple levels, including a landscape approach that reinstates endemic flora of the Sydney peninsula and provides a ground-floor garden for residents, reconnecting the site to its pre-European history. A brick podium further strengthens this relationship to context, integrating planting and fine bronze detailing that references the predominant material language of Macleay Street.”

The three-level podium will be topped by a communal resident space, featuring a covered pool designed to receive direct afternoon sun in winter, a neighbouring reflection pool, dining and event areas oriented to maximise sunset views, and an outdoor exercise zone.

<img alt="Time &amp; Place" data-entity-type="file" data-entity-uuid="8d3eedc1-babb-44a3-bd96-d8a42f3adf1f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-20%20at%209.37.48%E2%80%AFAM.png?VersionId=Ii7.4dvqNatu5GQi6bhqNjAswrMB998." />

The design also incorporates highly crafted shopfronts and a clearly defined residential entry to activate the street. Juliette balconies to the podium residences will provide passive surveillance and a strong sense of habitation.

Above, the larger apartments are housed within a light-coloured masonry and bronze tower.

“The tower steps back in a series of gently curved volumes that reference the rich Art Deco context of Macleay Street,” the architects said. “Carefully calibrated vertical fins frame the views while providing privacy and a sense of refuge.”

<img alt="Time &amp; Place" data-entity-type="file" data-entity-uuid="6fab60f4-3140-4469-b47a-48c781e0a30b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-20%20at%209.28.44%E2%80%AFAM.png?VersionId=e5XxrM3kzdASdKlcIACHAHbOSZhSKC9O" />

Time &amp; Place has been one of the most active developers nationally in the last 12 to 24 months. Late last year they completed&nbsp;The Queensbridge in&nbsp;<a href="https://www.apartments.com.au/developments/southbank-vic-3006">Southbank</a>, a mixed-use tower with 353 apartments and a hotel. They are currently selling Park Modern, 246 apartments near the famous Botanic Gardens in South Melbourne.

The developer has approval for The Burke, a mixed-use project in&nbsp;<a href="https://www.apartments.com.au/new-apartments/glen-iris-vic-3146">Glen Iris</a>&nbsp;being delivered in partnership with Woolworths. The 60 apartments, positioned above a new Woolworths supermarket, are expected to launch in the coming months. Time &amp; Place is also progressing plans for the redevelopment of&nbsp;<a href="https://www.apartments.com.au/developments/northcote-vic-3070">Northcote</a>&nbsp;Plaza, and have recently submitted plans for a <a href="https://www.apartments.com.au/news/vic/time-place-unveils-plans-22-storey-south-melbourne-tower">22-storey tower</a>, another in South Melbourne.

In&nbsp;<a href="https://www.apartments.com.au/developments/sydney-nsw">Sydney</a>, the developer has two projects in Manly: Two Tides, which is currently under construction, and an ultra high-end building on&nbsp;<a href="https://www.apartments.com.au/buildings/shoreline-manly-beach-89-90-north-steyne-manly">North Steyne</a>, fronting the beach. It is also continuing to work through the redevelopment of The Chimes building on Macleay Street in&nbsp;<a href="https://www.apartments.com.au/developments/potts-point-nsw-2011">Potts Point</a>, as well as Marlborough House, the redevelopment of the original David Jones warehouse building in&nbsp;<a href="https://www.apartments.com.au/developments/surry-hills-nsw-2010">Surry Hills</a>.

First look: Time & Place settles on design for The Chimes, Potts Point redevelopment

<a href="https://www.apartments.com.au/developers/develotek">Develotek</a> is joining the likes of TOGA, Deicorp, and One Global Capital, betting on a boom in Five Dock ahead of the 2032 mooted opening of the Five Dock Metro Station.

Develotek, which is currently developing Bianca on the Drummoyne waterfront and has plans approved for a tower in Chatswood, has filed a State Significant Development Application for a <a href="https://www.apartments.com.au/new-apartments/79-81-queens-road-five-dock-nsw-2046">two-building project in the evolving Kings Bay precinct</a>.

The buildings, one more boutique just five storeys and the other 26 storeys, will rise from an 3,158 sqm site across&nbsp;79–81 Queens Road and 2–8 Spencer Street, will home 134 one-, two-, and three-bedroom apartments, above ground-floor retail and five basement levels of parking.

A key component of the proposal is the inclusion of 15 per cent of residential floor space as in-fill affordable housing, unlocking additional height and density under the Housing SEPP.

<img alt="First Look: Develotek lodges State Significant shop top housing project in Five Dock precinct" data-entity-type="file" data-entity-uuid="3ee31bf7-75ba-4bc5-b190-49885193219f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/podium_2.png?VersionId=730UbrduuwK3C1sO28RHjiLPUPqXqjkh" />

Designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a>, the scheme adopts a podium-and-tower configuration, with a five-storey street wall along Queens Road transitioning to a 26-storey tower set deeper into the site. The ground plane prioritises activation and permeability, with retail frontages and a new through-site link connecting Queens Road to Spencer Street.

At the upper levels, the tower façade has been conceived using a modular system to support prefabrication and reduce construction waste, while improving build efficiency. The splayed form draws on the geometry of surrounding industrial rooftops, reinterpreting the area’s heritage in a contemporary expression while also helping to reduce solar heat gain to east and west-facing apartments.

“This project aspires to transform a former industrial site into a connected, resilient and people-focused urban community, grounded in Country, shaped by history, and designed to enrich everyday life within the evolving Kings Bay Precinct,” said John Walsh, Principal at Plus Studio.

The proposal reflects the broader transformation of the Kings Bay Precinct under the Parramatta Road Corridor Urban Transformation Strategy, marking a shift from its industrial past to a higher-density, mixed-use urban neighbourhood.

<img alt="First Look: Develotek lodges State Significant shop top housing project in Five Dock precinct" data-entity-type="file" data-entity-uuid="abde734c-1e31-4a97-a1d2-fa9bcf31c380" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/building%20podium.png?VersionId=fNUupP6u146yEytQT31kKVRxwtACgPpP" />

Develotek is emerging as an active participant in the state’s affordable housing-led uplift pathway. The developer recently secured approval for a 34-storey mixed-use tower in Chatswood, where it similarly leveraged the in-fill affordable housing provisions to increase scale and deliver a 101-unit scheme with dedicated affordable apartments.

Their entry into Five Dock places them alongside a growing list of developers targeting the suburb ahead of its anticipated transport uplift, with Sydney Metro set to extend into the area. Major players including TOGA, Deicorp, and One Global Capital are all progressing large-scale precinct-style developments nearby, collectively reshaping the low-rise industrial fabric into a higher-density mixed-use corridor.

The Five Dock site sits within the Kings Bay Precinct, a key renewal area under the Parramatta Road Corridor Urban Transformation Strategy, where planning controls support significant uplift tied to affordable housing delivery. The consolidated 3,158 sqm site is currently occupied by low-rise industrial uses, including warehouses and vehicle workshops, earmarked for transition.

First Look: Develotek joins in Five Dock apartment boom

Ascot’s Racecourse Road continues to be a hive of activity for Brisbane developers.

Following Fortis and GRAYA, which are both preparing new projects along the key strip connecting Kingsford Smith Drive and Eagle Farm Racecourse, local developer <a href="https://www.apartments.com.au/developers/skyhold">Skyhold</a> is the latest to lodge plans for its own development.

The group is proposing One One Two Residences, a boutique project comprising just seven apartments, named after its address at 112 Racecourse Road.

The proposal outlines a five-storey building on an 810 sqm site. The built form slightly exceeds the four-storey expectation under the neighbourhood plan, aligning instead with the emerging character of the strip. As the planning report notes, “the locality is characterised by a transition toward medium-rise residential development, with a number of recent developments… above the stipulated height limits.”

<img alt="First Look: Skyhold lodges plans for boutique Ascot apartments as Racecourse Road revival gathers pace" data-entity-type="file" data-entity-uuid="ec577631-8c51-4163-960e-e7b3a77d655b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Ascot.png?VersionId=iAzQ46D4Uu1UqiS0mVnlcy9jeFKBpJIj" />

Designed by 111 with landscape architecture by <a href="https://www.apartments.com.au/landscape-architect/paul-bangay-garden-design">Paul Bangay Studio</a>, the scheme adopts a layered architectural approach with strong articulation and a subtropical response. Deep balconies, integrated planters, and a mix of masonry and textured finishes define the façade, while upper-level setbacks reduce perceived bulk. The architectural statement describes “a series of horizontally expressed layers, defined by deep balconies and a consistent robust material palette,” aimed at delivering a refined streetscape presence.

Apartments are configured as large-format residences, including multiple three-bedroom layouts and a full-floor penthouse, supported by ground-level parking. A rooftop terrace will provide communal amenities including a pool and landscaped recreation areas. The design prioritises privacy, natural ventilation, and greenery, with planting integrated across all levels to soften the building form and contribute to the public realm.

<img alt="First Look: Skyhold lodges plans for boutique Ascot apartments as Racecourse Road revival gathers pace" data-entity-type="file" data-entity-uuid="1e1219bd-b45a-4d7f-bbc7-7207d7b2fc94" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Ascot%20entry.png?VersionId=JIoUOLMgQ5xWpEF0etEI3ffIoIVjD7gO" />

The proposal sits within the Racecourse Road precinct, a key mixed-use spine in Ascot that continues to attract renewed development interest.

Later this year national developer Fortis will launch its own boutique development, which, pending council approvals, will be 16 apartments designed by Koichi Takada Architects, just down the street.

“Racecourse Road is going through a massive revitalisation and we’re proud to be a part of that transformation,” said Fortis's QLD General Manager, Dan Boman.

Nearby, GRAYA is advancing its larger-scale The Gallery, a mixed-use shop-top housing project designed to act as a “catalytic project for Racecourse Road.”

First Look: Racecourse Road, Hamilton revitalization to continue as Skyhold joins the party

Twenty-five years after launching one of Australia’s most visionary and successful masterplanned beach communities - Casuarina on the Northern NSW Tweed Coast - developer Consolidated Properties Group has unveiled plans for an $800 million sister project located 10 kilometres south, at Cudgera Creek near the coastal town of Pottsville.

CPG has taken the wraps off Caldera, a 78-hectare masterplanned village that builds on the legacy of Casuarina and aims to help address Northern NSW’s coastal housing shortage via the delivery of 550 homes built in a sustainable manner and addressing affordability and housing diversity, while also focusing on architectural and ecological merit.

Caldera is being brought to life by the same creative team that delivered Casuarina, led by Consolidated Properties CEO and chairman Don O’Rorke, Hutchinson Builders chairman Scott Hutchinson and renowned urban designer Brian Toyota, of architectural practice Bureau Proberts.

CPG has lodged a rezoning application with Tweed Shire Council for the Caldera site, which has been designated since 1991 as the Dunloe Park Urban Release Area, the final land release area within the Pottsville locality and one of only four remaining growth areas along the entire Tweed coastal strip. Preliminary plans for Caldera feature a 13-hectare retail and commercial precinct at the core of the village, surrounded by meticulously planned residential areas comprising around 550 homesites.

The retail hub will be anchored by a Coles Supermarket and will offer 7000 sqm of retail and 23 commercial lots designed to serve the local community and bring together curated shopping, dining, gym, wellness, childcare, medical and other essential services.

<img alt="Cons prop" data-entity-type="file" data-entity-uuid="fca7dc71-4b71-45b1-bb04-5a60bd7158d0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-20%20at%208.34.04%E2%80%AFAM.png?VersionId=vAKwIvLuwmTKj6blHJRYIEeXS_8lCgUx" />

The project will create more than 1500 jobs over its development cycle, according to its economic modelling, and significantly address the shortage of employment land in the Tweed.

The residential areas will encourage a sense of community via a cohesive urban design that encourages walking, cycling, enhanced resident connectivity and reduced reliance on cars via bike paths and pedestrian-friendly streets.

Homesites will include a range of options from premium ridge-top homes to affordable housing options, ensuring a community that is inclusive of different income levels and designed to appeal to a wide demographic from baby boomers to families, singles and professionals. Architectural and planting covenants on home building will support the village’s built form and protect its character.

O’Rorke says CPG intends Caldera to be a model project delivered efficiently in a dedicated urban release area and ‘very much for this region and for this time’.

“Our vision for Caldera is to create a modern coastal village with its own unique northern NSW identity,” he said.

“Building on our legacy of Casuarina, 25 years on, this new village is designed to stand apart, offering the future of modern living, balancing the natural beauty of the region with contemporary amenities and convenience.

“Caldera will be more than just a place to live - it will be a welcoming, inclusive coastal village neighbouring Pottsville that invites visitors and embraces new residents. With its strong ties to the land, vibrant lifestyle and sense of place, Caldera will set a new standard for village living in Northern NSW.”

<img alt="CPG" data-entity-type="file" data-entity-uuid="9a5a7cf4-5f76-4ddf-bd05-c8fb77d0a787" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-20%20at%208.33.59%E2%80%AFAM.png?VersionId=J1CzCGD7kE7fcAMd41V4pKAf_sI4L5Jv" />

The project’s centrepiece is environmental sustainability, with comprehensive wetlands protection measures and planting of native trees, parklands, village greens and communal grounds to enhance the natural beauty of the area.

CPG will also deliver a developer-funded wastewater treatment plant to ensure zero ocean outflows and provide high quality long-term infrastructure for Tweed Shire.

A key focus is wildlife management planning, including extensive conservation controls for the West Pottsville koala population, aligned with Tweed Shire Council’s Koala Plan of Management and designed to enhance koala habitat connectivity and future population growth.

Caldera will extend the existing koala corridor by connecting koala precincts west of the Pacific Highway with populations in the north and east precincts. A koala underpass will be created under Pottsville Road to complete the connection of this important corridor. Native tree plantings will expand essential koala food sources, while approximately eight kilometres of exclusion fencing will be constructed to safeguard the koalas from urban threats.

The Caldera site is nestled in the hills of Cudgera Creek and benefits from its rich natural surroundings including the Pottsville Wetland, Cudgera Creek Nature Reserve and nearby Pottsville Beach.

It takes its name from the surrounding Tweed Shield Volcano and Caldera, the vast bowl-shaped depression stretching from Byron Bay to the Queensland border that 20 million years ago was the world’s largest shield volcano and which has shaped the region’s striking landscape, with Mount Warning standing as one of its most iconic features.

The development is a joint venture between CPG and Pottsville Development Corporation, which made its first investment in Pottsville more than 45 years ago and is the developer of Black Rocks By the Sea, a masterplanned community now part of the fabric of Pottsville and which was the catalyst for the construction of a bridge across the Pottsville Estuary, providing direct access to the beach.

CPG’s $1.5 billion Casuarina Beach township, 10 kilometres to the north of Caldera, commenced construction in 2000 and has become the model for modern Australian, eco-sensitive beachside development.

Consolidated Properties unveils $800m coastal village Caldera in Casuarina

Aldi

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Two Melbourne retail spaces securely leased to global supermarket giant Aldi have been listed for sale.
There's little doubt the most sought after will be the 1,650 sqm retail premises at <a href="https://www.realcommercial.com.au/for-sale/property-aldi-8-franklin-street-melbourne-vic-3000-503357750" target="_blank">8 Franklin Street</a> in the CBD (pictured top), given its high exposure of foot traffic due to its 25 metre frontage in the heart of the city.
The ground floor space which spans across the Verve and Milano twin-tower development is leased to Aldi who are on a 10 year lease with options to extend.
There's basement parking for 44 cars.
Colliers International agents Oliver Hay, Daniel Wolman, Chris Lin and David Sia are marketing the property for a December 6 auction.
The latest listing is a brand new space on the ground floor of Fitzroy apartment block The Lyric building (below), on the <a href="https://www.realcommercial.com.au/for-sale/property-239-245-johnston-street-aldi-fitzroy-vic-3065-503388222" target="_blank">corner of Gore and Johnston Streets</a>, near the busy Smith Street.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/11/13/Fitzroy%20Aldi.jpg" alt="">
Offered by Teska Carson's Adrian Boutsakis and Larry Takis, the 1,400 sqm floor space and 52 car spaces is leased to Aldi on a 10 + 10 + 10 year lease.
They pay $640,000 per annum and there are annual rent increases.
Aldi have over 10,000 stores worldwide. 
 
<a href="https://www.realcommercial.com.au/for-sale/property-aldi-8-franklin-street-melbourne-vic-3000-503357750"> </a>
<a href="https://www.realcommercial.com.au/for-sale/property-239-245-johnston-street-aldi-fitzroy-vic-3065-503388222"> </a>
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jrobinson-rf4aSBido9

Two ALDI supermarkets in Melbourne for sale

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Crown Group has secured ALDI as a tenant of its Eastlakes Live residential precinct which it is developing on the Eastlakes Shopping Centre site.
The supermarket will re-open with nearly 20% more retail space and a fresh new look when stage one nears completion.
The new Eastlakes Live lifestyle precinct will offer more than 500 luxury apartments and an array of new retail and dining offerings that will transform the area into a destination in itself.
Stage one of Eastlakes Live by Crown Group was launched in May 2018.
Construction is underway on stage one, which will comprise three buildings with a total 133 one, two and three-bedroom apartments and four penthouses.
It will also have a 2800 sqm retail area below offering 12 outlets including the new ALDI store, a second supermarket, bakery, butcher and chemist.
Residents will have access to sophisticated resort-style health and fitness facilities including a 25 m swimming pool and gym. They will also have a rooftop lounge, barbeque facilities, function room and landscaped gardens.
Crown Group Chief Operating Officer Pierre Abrahamse said having a new, bigger ALDI supermarket was a major milestone in creating the new town centre, which would become a drawcard attraction for residents.
Amended plans for Eastlakes Live stage two are pending council approval and include 399 new apartments across five buildings and a concept for a new town centre, with a retail and restaurant precinct that includes a full-line supermarket and eat street offering various restaurant and dining options.
Apartments are for sale from $680,000 to $1,755,000.
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j.ballantyne1990-6AQqhLzZaK

Crown Group secure ALDI as Eastlakes Shopping Centre tenant

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Woolworths has increased its lead as Australia’s top grocery retailer increasing its share of Australia’s total grocery market to 34% in 2018, up 1.4ppts from a year ago according to Roy Morgan’s latest survey data.
Their data showed, while Woolworths increased its market share the newly independent Coles now has a share of 27.6% of the total grocery market down 1.6ppts on a year ago.
 German supermarket chain Aldi has grown its market share to 11.4%, up 0.5ppts from a year ago.
Other Supermarkets outside the ‘big four’ such as 2018 Foodland, Foodworks and others increased their share of the total grocery market to 9.1% (up 1.2ppts) while IGA’s grocery share was down 0.4ppts to 7.1%.
Total grocery market – % market share 2017 cf. 2018
<a href="https://www.propertyobserver.com.au/images/2019/4/8/MARKET%20SHARE%20.png" target="_blank">Click here</a> to enlarge:
<img src="https://www.urban.com.au/images/2019/4/8/MARKET%20SHARE%20.png" alt="">
 
Source: Roy Morgan Single Source. 
Michele Levine, Roy Morgan CEO, commented that the impressive performance of Woolworths over the last year has Australia’s leading grocery retailer in a strong position to deal with the entry of German ‘hypermarket’ Kaufland into Australia’s $100 billion+ grocery market:
“Australia’s leading supermarket chain Woolworths has increased its lead in Australia’s increasingly competitive grocery market in 2018 now capturing over a third of Australia’s total grocery spend in 2018 – up 1.4ppts to 34% from a year ago."
“The successful year for Woolworths has been built upon strong performances across the four key categories of fresh food. Woolworths has grown its market share in dollar terms for fresh meat, fresh deli, fresh bread and also fresh fruit and vegetables and is the market leader in all four categories ahead of main rival Coles."
“The demerger of Coles Group from industrial conglomerate Wesfarmers in the December quarter of 2018 means Australia’s second largest supermarket chain now has the opportunity to refocus on its core business ahead of the imminent arrival of German retailer Kaufland."
“Kaufland has already bought six industrial sites in Melbourne at which it plans to open its successful ‘hypermarkets’ over the next two years before rolling out stores Australia-wide following in the footsteps of fellow German retailer Aldi. Aldi also had a good year in 2018 and grew its share of the total grocery market by 0.5ppts to a new high of 11.4%."
“In addition to Kaufland the Australian grocery market is also anticipating a rollout of the ‘Amazon Fresh’ brand in the near future after the American Internet giant launched a food and grocery segment (although not yet fresh food) in the December quarter 2018."
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Woolworths grew grocery market share to 34% 2018: Roy Morgan

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GUEST OBSERVATION
Dick Smith has laid the blame for closing his Australian-made processed food lines squarely at the feet of Aldi Australia.
He accused the German retailer of “extreme capitalism” and warned the CEOs of Woolworths and Coles that “unless your companies move towards [Aldi’s limited range and high proportion of private brands], you will very likely become uncompetitive”.
But this betrays a fundamental misunderstanding of Aldi’s strategy and the limits of its appeal in the Australian market.
An important element of Aldi’s strategy is a severely limited range of “preselected” products, overwhelmingly private brands. The company’s smaller range (some 1,500 store-keeping units as opposed to 20,000 to 30,000 in a large Coles or Woolworths outlet) has several advantages – in terms of store footprints, warehousing infrastructure and supplier discounts, to name a few.
A proportion of these savings are passed on to consumers to ensure their appeal with households wanting to stretch their shopping dollars further.
This strategy and disciplined execution propelled the company’s growth.
From its first two stores in the Sydney suburbs of Marrickville and Bankstown, Aldi gradually expanded across the eastern seaboard. It was not until 2016 that Aldi started opening stores in South Australia and Western Australia.
These new territories promised significant growth opportunities while store openings in the established territories were largely restricted to gap-filling.
By 2018, Aldi was operating more than 500 outlets around Australia and claiming roughly 13% of the Australian supermarket industry. Aldi’s gain in market share has overwhelmingly come at the expense of the smaller, independent supermarkets (IGA-affiliated as well as others).
Coles and Woolworths have chiefly responded to Aldi through price cuts and by boosting their share of private brands. While competition in the Australian supermarket sector has increased, it remains a lucrative oasis in comparison to international markets.
Low-hanging fruit is gone
As its stores now span the entire nation, Aldi’s growth can be expected to slow down. The company is unlikely to “turn on” and overwhelm Coles and Woolworths, as Smith predicts, because of the inherent limitations of the Aldi formula.
Aldi has successfully appealed to a particular segment of the market. It is a segment of shoppers prepared to trade low prices (coupled with sound product quality) for a variety of conveniences offered by traditional supermarkets. These shoppers readily accept Aldi’s highly restrictive range of product, the lack of manufacturers’ brands, and austere stores with minimal service at the cash register or in store.
The company has also been successful in expanding this segment, by convincing a growing number of people to do at least part of their shopping with Aldi and accept the trade-off at the heart of its offering.
But the majority of Australian shoppers prefer to do (the bulk of) their shopping with the two incumbents (Coles and Woolworths who still account for more than two-thirds of the market) as well as a shrinking number of independent supermarkets and a growing set of alternative sources such as farmers’ markets or subscription-based retailers (Costco).
Strategy has limits
Aldi exemplifies strategy scholar Michael Porter’s dictum that the essence of strategy is choosing what not to do. In embracing the “Aldi way”, the company has made hard strategic choices. Its strategy appeals to a sizeable segment of the Australian public.
But it’s turning away shoppers who value things other than what’s on offer at Aldi – larger choice, established brands, more service, plusher stores, in-store bakeries and delis or expanded fresh food sections. As a result, Aldi’s growth in Australia is going to reach its limits.
As far back as 2016, CEO Tom Daunt acknowledged that growth opportunities were slowing in existing territories. He also acknowledged the onset of cannibalisation between existing Aldi stores, a sure-fire indicator that their segment was becoming saturated:
"Increasingly those stores on the eastern seaboard are less often in virgin catchments and more often than not for the majority of those stores there is some impact on other existing Aldi stores."
A recent UBS report also picked up the increase in cannibalisation among Aldi stores. UBS analysts suggested Aldi store cannibalisation in South Australia and Western Australia was reaching levels not far behind the more established territories.
This indicates that saturation might be achieved sooner in new markets, and puts growth objectives in these states in doubt.
Since its arrival in 2001, the company has benefited the Australian public by injecting much-needed competition into the local grocery retail scene, thereby boosting Australian consumers’ spending power. While its success is testimony to the appeal of the Aldi formula, growth will inevitably peter out and the company will not overrun Australia’s existing retail giants.
<img src="https://counter.theconversation.com/content/100671/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">Aldi’s experience in Australia exemplifies the benefits as well as the limitations of clear and focussed strategy.
Tom Osegowitsch, Senior Lecturer, International Business and Strategic Management, University of Melbourne
Angela McCabe, Lecturer, Management, La Trobe University
This article was originally published on <a href="http://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/the-secret-to-aldis-success-is-choosing-what-not-to-do-100671" target="_blank">original article</a>.
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