The ACCC has rejected Coles’ plan to acquire a leasehold for a new supermarket and liquor store in Kalgoorlie-Boulder, citing risks of reduced competition and the potential exit of an independent rival.
- ACCC prevents Coles’ lease acquisition in Kalgoorlie
- Concerns over diminished competition and independent exit
- Coles aims to open large-format supermarket and Liquorland
- Four full-line supermarkets currently serve Kalgoorlie consumers
- New entry unlikely to offset competition loss promptly
ACCC Blocks Coles’ Expansion in Kalgoorlie
The Australian Competition and Consumer Commission (ACCC) has stepped in to stop Coles Supermarkets Australia Pty Ltd (ASX:COL) from acquiring a leasehold interest for a proposed supermarket and liquor store site in Kalgoorlie-Boulder, Western Australia. After a thorough Phase 2 review, the regulator concluded that the acquisition would likely substantially lessen competition in the local grocery market.
Coles intended to develop a large-format supermarket with a 2,800 square metre selling floor area, alongside a Liquorland outlet, on a currently vacant site at 95-106 Great Eastern Highway in the suburb of Somerville. This move would have expanded Coles’ footprint in Kalgoorlie, where it currently operates just one store.
Competition Risks and Independent Supermarket Exit
Kalgoorlie’s grocery market is served by four large, full-line supermarkets, including Coles, Woolworths, and two independent operators, plus smaller independents. The ACCC’s concern centres on the potential exit of an effective independent full-line competitor following Coles’ acquisition. The regulator warned that such a loss would reduce the competitive pressure on major chains, ultimately harming consumer choice and pricing dynamics.
ACCC Deputy Chair Mick Keogh emphasised the role of independent supermarkets as vital competitive constraints on the duopoly of Coles and Woolworths. He noted that while a new Coles store might benefit some consumers, the broader impact would likely be negative due to diminished rivalry and the risk of the independent’s assets leaving the market.
Regulatory Framework and Assessment Process
The acquisition was voluntarily notified to the ACCC in November 2025, ahead of the mandatory notification regime that commenced in January 2026. Under the new merger control rules, Coles and Woolworths must notify any acquisitions involving supermarket businesses or significant land interests regardless of monetary thresholds.
The ACCC’s in-depth Phase 2 review, triggered in January 2026, involved extensive inquiries and analysis of submissions from Coles and third parties. The statutory timeframe for completing such assessments is 90 business days, barring extensions. Ultimately, the ACCC found a “real commercial likelihood” that the acquisition would substantially lessen competition in Kalgoorlie over the longer term.
Implications for Coles and Regional Competition
This decision marks a notable regulatory check on Coles’ regional expansion strategy, highlighting the ACCC’s vigilance in preserving competitive dynamics in smaller markets. The ruling underscores the importance placed on independent supermarkets as sources of competition beyond the major chains.
Coles now faces the challenge of reassessing its growth plans in Kalgoorlie, where new entry to replace lost competition is unlikely to be timely or sufficient. The ACCC’s stance also signals to other major retailers that acquisitions threatening independent operators will face rigorous scrutiny under the strengthened merger control framework.
Bottom Line?
Coles’ Kalgoorlie expansion faces a regulatory roadblock that could reshape competition dynamics in regional supermarkets.
Questions in the middle?
- Will Coles pursue an appeal or alternative expansion strategies in Kalgoorlie?
- How might this decision influence the competitive positioning of independent supermarkets nationally?
- Could the ACCC’s approach here signal stricter scrutiny for future supermarket acquisitions in regional markets?