The Australian Competition and Consumer Commission has blocked Coles’ proposed acquisition of a supermarket and liquor store site in Kalgoorlie-Boulder, Western Australia, determining that the deal would likely result in a substantial lessening of competition in the region’s retail grocery market. The ACCC’s decision represents a meaningful setback for Coles’ regional expansion strategy and provides clarity on the regulator’s stance toward consolidation among Australia’s major supermarket chains.
Coles notified the ACCC of the acquisition in November 2025, proposing to develop a 2,800 square metre full-line supermarket and Liquorland liquor store on a vacant site at 95-106 Great Eastern Highway in Somerville. The ACCC initially approved the deal to proceed to Phase 2 assessment in January 2026 before ultimately determining that the acquisition should be prohibited. The announcement comes roughly seven months after the notification and represents the conclusion of the regulator’s in-depth assessment process.
The ACCC’s reasoning centres on the competitive structure of Kalgoorlie’s supermarket market, where consumers currently have access to four large full-line supermarkets operated by Coles, Woolworths, and two independent retailers, along with two smaller independent supermarkets. The regulator concluded that Coles’ new store would likely precipitate the exit of an effective independent competitor and result in reduced competitive constraints on the major supermarket chains. The ACCC noted that independent supermarkets provide important competitive benefits through choice, service differentiation, quality and range offerings, as well as price competition on selected products. Critically, the regulator determined that new entry would not occur quickly or substantially enough to offset the loss of competition resulting from the independent store’s exit.
For investors in Coles, the decision underscores the regulatory environment governing supermarket acquisitions and expansion into regional markets. Coles operates 860 stores nationally and currently maintains just one location in Kalgoorlie, making the proposed acquisition part of a broader expansion initiative. The ACCC’s prohibition suggests that even regional expansion opportunities may face substantial regulatory hurdles, particularly where such expansion could lead to the displacement of independent competitors. This outcome may constrain Coles’ organic growth prospects in regional and remote locations across Australia.
The decision also illustrates the regulator’s evolving approach to retail consolidation, with particular emphasis on protecting independent supermarkets as important competitive constraints. Future acquisitions by Coles or Woolworths in regional markets may face comparable scrutiny, especially where they risk displacing established independent operators. Investors should monitor whether Coles pursues alternative expansion strategies in regional markets, whether the company attempts to modify the Kalgoorlie proposal to address ACCC concerns, and how the broader supermarket sector responds to this precedent. The ACCC’s Phase 2 Determination has been added to its acquisitions register and provides detailed reasoning that will likely inform future acquisition assessment. This announcement is price sensitive and has been classified as material by the ASX.
View the full ASX announcement (PDF)
About Coles Group Limited (ASX: COL)
Coles Group operates one of Australia’s two major supermarket chains along with liquor retail and convenience store businesses. It serves millions of Australian customers weekly across its store network.
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