The Australian Competition and Consumer Commission (ACCC) has quashed Woolworths Ltd's plans for a new supermarket, which the chain fears could set a precedent that would block its hopes of building up to 25 supermarkets a year, according to The Australian Financial Review.
Woolworths may challenge the decision, which blocks the supermarket chain's plans for a new site in a western Sydney housing estate because the ACCC ruled it already has a store in the same suburb.
Although the decision directly affects plans to acquire a development site at Glenmore Ridge, where the chain had hopes of building a 3,200-square-metre supermarket and specialty shops, Woolworths is especially concerned that the ruling could be precedent-setting and weigh on plans to expand its store numbers aggressively.
“Woolworths already operates the only supermarket in the suburb of Glenmore Park, and it has the next closest supermarket located in the nearby suburb of South Penrith,” ACCC chairman Rod Sims said, according to the AFR.
Competition lawyers reportedly said the ruling could affect the issue of creeping acquisitions and the extent to which supermarket chains will be allowed to expand site-by-site.