FoodWorks buys Coles in bulk for $35 million

QUEENSLAND consumers are set to benefit following an approval by the Australian Competition and Consumer Commission (ACCC) for FoodWorks to acquire 45 Coles supermarkets.

FoodWorks will now have around 750 member stores across Australia, in many cases competing directly with major supermarket chains.

Estimates from the ACCC’s grocery inquiry suggest that the number of stores by the different supermarket chains in Australia is around: Woolworths 780, Coles 750, Aldi 170+, Franklins 80 and various independents 2800.

Aldi hopes to increase the number of stores in Australia to more than 700 over the next few years. Rival bulk buyer Costco will soon open its first major Australian store in Melbourne.

Although prolonged drought has influenced food prices in Australia, open competition is sustaining downward pressure on grocery prices.

The Federal Government has already moved to relax the foreign investment rules regarding the entry into Australia of foreign supermarket operators such as Aldi and Costco.

FoodWorks CEO Peter Noble, says the company’s intention to buy 45 Coles stores, eight with adjoining liquor outlets, delivers the most significant growth in the company since its 2007 internal capital raising.

“This acquisition, valued at around $35 million, significantly contributes to achieving our growth strategies,” he says.

“Our focus over the last two years has been on new store development. These stores have a significant industry footprint and will allow the company to quickly and cost effectively develop our ongoing Australian growth strategy.”

According to Noble, the deal will benefit all stakeholders including the local communities serviced by the stores and FoodWorks shareholders.

Get our daily business news

Sign up to our free email news updates.

 
Unpacking equity: Finding your funding fit
Partner Content
Armed with a growing business and a great opportunity, a business owner’s next challe...
Australian Business Growth Fund
Advertisement

Related Stories

Space Machines Company’s partnership with Orbit Fab blasts into orbit aboard SpaceX Transporter

Space Machines Company’s partnership with Orbit Fab blasts into orbit aboard SpaceX Transporter

The mission by Adelaide-based Space Machines Company to deliver &ls...

Gilmour Space receives green light for Australia's first orbital spaceport

Gilmour Space receives green light for Australia's first orbital spaceport

Fresh after raising $55 million in a Series D round led by the...

Survey finds founders 'more accepting of economic challenges' with earlier push to profitability

Survey finds founders 'more accepting of economic challenges' with earlier push to profitability

A survey of Australian founders conducted by law firm Herbert ...

Watchdog takes owner of Noni B, Katies to court over late deliveries

Watchdog takes owner of Noni B, Katies to court over late deliveries

Mosaic Brands (ASX: MOZ), the fashion retail powerhouse behind such...