Supermarket giant grilled on vacant land

Coles executives say the company’s ownership of a vacant lot 200m from one of its supermarkets in an inner suburb of Perth is not an example of anti-competitive land banking.

The consumer watchdog will run its final day of public inquiries into supermarkets on Friday, and Coles executives are giving a second day of evidence.

Woolworths, Metcash and Aldi heavies have been hauled into the inquiry earlier this month.

But on Thursday, Coles defended its ownership of a vacant lot in the Perth suburb of Maylands, about 5km from the CBD.

The inquiry was told that Coles had owned the land since late 2008. The lot sits 180m across busy Guilford Rd from long-established Coles Maylands.

Coles Group’s attempts to build a large liquor store were knocked back in court, and a later attempt to sell the land fell through, the inquiry was told.

Coles owns 42 undeveloped sites and has development applications in for 25 of the sites, the inquiry was told on Friday morning.

Coles and Woolworths’ perceived practice of owning prime real estate and not turning it into stores – known as land banking – has been one focus of the Australian Competition and Consumer Commission investigation.

This inquiry is separate from the case where the ACCC is separately suing Coles and Woolworths for allegedly offering fake discounts.

Land banking stymies competitors from owning land that could be a store, diluting consumer choice. Coles has about 28 per cent of the Australian marketshare, and Woolworths has about 37 per cent.

Aldi has a 10 per cent market share, and IGA supplier Metcash holds about 7 per cent.

At the ACCC inquiry on Thursday, Coles chief executive Leah Weckert said the company had a limited amount of capital and wanted to own land that would in the future make money.

“As a company with a finite balance sheet we are trying to use as best we can, I want to be investing in properties that are going to give us a return,” Ms Weckert said.

Coles property general manager Fiona Mackenzie said owning the vacant Maylands land had not hindered competition, as an IGA and Aldi operated nearby.

There is an IGA directly across Guilford Rd from the vacant land.

Originally, Coles Group wanted to build a large liquor store on the vacant site but faced opposition and the courts knocked back the liquor licence. Later, in 2019, “another large retailer” declined to buy the land, Ms Mackenzie said.

As it stands, Coles said it planned to build a “dark store” warehouse for filling online orders on the land.

The inquiry continues on Friday.