ACCC blocks Coles from opening second Kalgoorlie supermarket

The Australian Competition and Consumer Commission has blocked Coles from opening a second supermarket and liquor store in Kalgoorlie-Boulder, Western Australia, in an early test of the regulator’s tougher merger powers.

The decision stops Coles from taking over a vacant site in Somerville on Great Eastern Highway for a new full-line supermarket and liquor store. Coles notified the ACCC of the proposal in November 2025.

The regulator said the proposal first went through a Phase 1 review before being escalated to a more detailed Phase 2 assessment. After that review, the ACCC concluded the deal would likely substantially lessen competition in Kalgoorlie’s grocery market.

What the ACCC decided

The ACCC said the central issue was not simply whether Coles could add another store, but whether the new outlet would weaken competition in a market that is already closely balanced.

It said there was a real prospect an effective independent competitor could exit the market if the Coles store opened.

According to the regulator, Kalgoorlie shoppers are currently served by Coles, Woolworths, two independent full-line supermarkets and two smaller independent supermarkets.

The ruling gives an early sign of how aggressively the ACCC may use its new merger powers in retail, especially where a property deal could reshape local competition rather than involve a conventional corporate takeover.

How the plan progressed

Coles’ proposal was first lodged with the ACCC in November 2025. The regulator then moved the deal through its initial review and into Phase 2, which is a more detailed examination of competition effects.

By July 1, 2026, the ACCC had decided to block the plan outright. The regulator publicly announced the decision after concluding the site deal would harm competition in Kalgoorlie’s supermarket market.

The proposed store was to be built on a vacant site in Somerville, on Great Eastern Highway, and would have added another full-line Coles supermarket and liquor store to the town.

Coles' response

Coles rejected the ACCC’s reasoning and said blocking the project does not promote competition.

The company said the second store would have given customers greater choice, more convenience and access to more than 24,000 products.

It also said the project would have improved amenities and added more online home-delivery capacity for the region.

Coles argued that the regulator underestimated Kalgoorlie’s population growth, industrial activity, planned residential development and FIFO workforce.

The company said it will review the decision and consider its next steps.

Why it matters

Kalgoorlie-Boulder is a regional mining centre where supermarket competition is already concentrated, making it a useful test case for how the ACCC will apply its expanded merger powers.

The case matters to independent grocers because the regulator said a Coles entry at the proposed site could threaten the viability of an effective local competitor.

It also matters to landlords and developers because the ruling suggests the ACCC may scrutinise leasing deals that could change market structure, even when the deal is framed as a store expansion rather than a major acquisition.

For shoppers, the decision means Coles cannot proceed with the second store unless it finds a way to revisit or reshape the proposal.

The ruling is likely to be watched closely in future supermarket property disputes, as competition concerns around grocery pricing and concentration remain politically sensitive in Australia.