The ACCC has blocked Coles from opening a second supermarket in Kalgoorlie-Boulder, making the WA mining city the first major test case under Australia’s new supermarket acquisition rules.
The Australian Competition and Consumer Commission rejected Coles’ plan to take control of a vacant site in Somerville, near Kalgoorlie Airport, where the retailer wanted to build a full-line supermarket and Liquorland store. The watchdog found the proposal was likely to substantially lessen competition by increasing pressure on independent grocers already serving the regional market.
The decision affects more than one proposed store. It shows how the ACCC may treat future supermarket expansion plans where a new major-chain outlet could weaken smaller competitors and reduce consumer choice over time.
What Coles Planned to Build
Coles wanted to acquire a leasehold interest at Lots 95-106 Great Eastern Highway in Somerville, in the south-west of Kalgoorlie-Boulder.
The project would have included a supermarket of about 2,800 square metres and a Liquorland outlet as part of a new neighbourhood development. If approved, it would have given Coles a second full-line supermarket in the city.
The official case is listed on the ACCC acquisition register, which confirms the regulator assessed the proposed Kalgoorlie supermarket and liquor site under its merger review process.
Why the ACCC Rejected the Proposal
The ACCC said the new Coles store could deliver some short-term benefits, including extra convenience for some shoppers. But it decided the longer-term risk to competition was too serious.
The regulator found there was a real prospect the development could push an effective independent supermarket out of the market. If that happened, shoppers could end up with fewer genuine alternatives, less variety and weaker local competition.
ACCC Deputy Chair Mick Keogh said independent supermarkets place important pressure on major supermarket chains by competing on service, quality, range and price for some products. The ACCC also concluded that new entry into the Kalgoorlie market would not happen quickly enough to replace any lost competition.
Kalgoorlie’s Supermarket Market
Kalgoorlie-Boulder has about 30,000 residents, but its economy also serves mining operations, surrounding communities and a fly-in, fly-out workforce.
The city already has an existing Coles, Woolworths, Spudshed, O’Connor Fresh IGA, Lionel Street IGA and smaller independent grocery stores. The ACCC said four supermarkets or grocery stores are within about a six-minute drive of the proposed Somerville site, with two more within roughly nine minutes.
If the new store had opened, Coles would have operated two of Kalgoorlie-Boulder’s four full-line supermarkets. The ACCC said that would increase the influence of Coles and Woolworths in a market where independent retailers remain important for consumer choice.
Why This Decision Is Historic
The ruling is the first supermarket refusal under Australia’s new mandatory notification regime, which started on January 1, 2026.
Under the new rules, major supermarket chains must notify the ACCC before certain deals go ahead. That includes buying another supermarket, taking a lease over a vacant supermarket site or developing a new greenfield supermarket location.
The Kalgoorlie case is therefore an early signal that the regulator will look beyond the immediate benefits of a new store and examine whether the market could become less competitive in the future.
Coles Says the ACCC Got It Wrong
Coles disagrees with the decision and says it is reviewing its options.
The company argued that blocking a supermarket on a vacant site does not promote competition. It said the proposed store would have created local jobs, improved convenience, offered a wider product range and helped meet growing demand.
Coles also said the ACCC underestimated Kalgoorlie’s growth prospects. The retailer pointed to mining activity, planned residential development and demand from the region’s FIFO workforce.
The company said its business case did not rely on any existing supermarket leaving the market and assumed competitors would continue operating over time.
Why Independent Grocers Supported the Ruling
Independent supermarkets in regional towns often face pressures that national chains can absorb more easily, including freight costs, staff shortages and smaller buying scale.
Lionel Street IGA owner Nitendra Raj supported the ACCC decision, saying Kalgoorlie already had enough grocery retailers and that another Coles could make it harder for smaller stores to compete for staff and customers.
The issue is not only the number of shopfronts. In a regional market, losing one independent supermarket can reduce the type of competition that shoppers notice through fresh food choice, local service and different product ranges.
Coles’ Previous Kalgoorlie Presence
Coles has previously operated two supermarkets in Kalgoorlie-Boulder. Until June 2021, it had a Brookman Street store in the CBD and another store at Hannans Boulevard Shopping Centre.
In 2021, Coles opened its current $16 million supermarket on Egan Street in the Kalgoorlie CBD. The former Brookman Street site later became part of a proposed Aldi supermarket and residential redevelopment.
Aldi later withdrew from that project in 2023 because of construction cost blowouts. The City of Kalgoorlie-Boulder has since acquired the vacant site, which has remained a local issue for residents.
What Happens Next
Coles can appeal the ACCC’s decision to the Australian Competition Tribunal. Under the process, the matter could be reviewed by a panel including a judge, an economist and a business expert.
An appeal would test how much weight should be given to Kalgoorlie’s future growth, mining demand, local jobs and the risk that an independent supermarket could exit the market.
The case will be watched by supermarket operators, developers, landlords and independent grocers across Australia because it may shape how future regional supermarket proposals are assessed.
Why It Matters Beyond Kalgoorlie
The ACCC’s decision shows that a new supermarket will not automatically be treated as good for competition simply because it adds another store.
In regional markets, the regulator may ask whether the new store strengthens consumer choice or simply shifts more sales to the biggest chains while weakening independent operators.
The ruling also comes at a time when Australian households are paying close attention to grocery prices, supermarket power and regional living costs. For more coverage of Australian consumer and business issues, visit the latest Australia news.
What It Means for Shoppers
For now, the proposed second Coles supermarket and Liquorland in Somerville will not proceed unless Coles successfully challenges the decision or returns with a revised proposal.
Kalgoorlie shoppers will continue to rely on the existing mix of Coles, Woolworths, Spudshed, IGA stores and independent grocers. The ACCC’s view is that preserving that mix is more important for long-term competition than allowing one more major-chain store that could weaken smaller rivals.
The decision turns Kalgoorlie into a national reference point for supermarket competition and gives independent retailers a clearer sign that the regulator may intervene when a major chain’s expansion could reshape a local market.
Make Swikblog your go-to source on Google for reliable updates, smart insights, and daily trends.
