Coles Group's (ASX:COL) proposed acquisition of a leasehold for a new supermarket and liquor site in the Kalgoorlie-Boulder area of Western Australia would materially harm competition in the retail groceries space, the Australian Competition and Consumer Commission (ACCC) said Wednesday following a phase two review.

Kalgoorlie has four large, full-line supermarkets and two smaller independent supermarkets. The proposed acquisition would likely "lead to the exit of an effective independent full-line competitor, and its assets, from Kalgoorlie and result in a reduction in the competitive constraints on the major supermarket chains," the regulator said.

The property, located at Lots 95-106 Great Eastern Highway in Somerville, is currently vacant, but M/Group unit M Holdings 4 is looking to develop it as a neighborhood center, the ACCC said.

In November 2025, Coles disclosed the acquisition of a leasehold interest at the property to open a large format supermarket and a Liquorland store.

"We disagree with the ACCC's decision," a Coles spokesperson said in a statement to MT Newswires, adding that it will review the decision before considering how to proceed.

"Blocking the development of a new supermarket on a vacant site does not promote competition," the spokesperson said. "It denies Kalgoorlie shoppers greater choice and convenience."