“Not a gimmick”: Billionaire takes on the supermarket giants promising cheaper groceries

A midnight idea, a Deer Park site snapped up in under an hour, and a promise of cheaper groceries for members are driving Adrian Portelli’s latest business move.

Melbourne billionaire Adrian Portelli says there was no grand strategy behind his decision to launch a supermarket in Deer Park, with the LMCT+ founder describing the move as a late-night idea he simply chose to pursue.

“When I come up with these ideas, there’s no real thought-processes behind it,” Mr Portelli told news.com.au.

“It’s something I came up with in the middle of the night and I decided to act on it. I’m a big believer of putting money where your mouth is and I want to keep giving back to my members.”

The 37-year-old businessman, who made most of his fortune through subscription-based loyalty and rewards platform LMCT+, said he was working at his recently-opened Preston petrol station when he decided to take on another venture.

“I said to the guys, ‘I want to build a supermarket, find me a site now’,” he said.

“Five minutes later one of my workers, he was looking and he was like ‘I found this one at Deer Park’. Within 10 minutes I called the agent, met him down here and we bought it.

“I reckon the whole process took less than an hour.”

Portelli, who grew up in Melbourne’s western suburbs, said choosing Deer Park was as “random” as the idea itself.

Before LMCT+ moved in, Hatchlands Plaza was better known to locals as a place to stop at the IGA or grab a last-minute meal from the nearby pizza shop. Now, the centre is drawing LMCT+ members from across Melbourne, who are travelling to the western suburbs store for discounts and in the process also helping nearby small businesses.

The members-only supermarket opened on Tuesday and immediately drew huge crowds, with demand so strong the store ran out of shopping trolleys on day one.

“Business has been good. It’s a whole new industry – I don’t know anything about this industry so I’m learning,” Mr Portelli said.

“I’ve been here every day and trying to get customer feedback (on) where we can improve and what we can do better in.”

The fit-out was completed in just a few months. Portelli credited “hundreds of people” for transforming the site, saying the former store has been entirely overhauled from top to bottom. The once-grey concrete frontage has been replaced with LMCT+’s royal blue branding, while inside the supermarket is organised into fresh, dairy, frozen and chilled areas, alongside aisles stocked with pantry staples, toiletries and laundry items.

“The guys absolutely killed it, the builders, the team, there were hundreds of people involved,” he said.

“If anyone came here before, you would not recognise it for what it was, it was a complete floor-to-ceiling restoration and renovation and they did a fantastic job.”

Portelli said pricing has been one of the biggest challenges, because comparing supermarket products is far more complicated than comparing petrol.

“With petrol, you got four items to compare pricing to and it’s a government portal so you can find all the prices at a click of a button. But when you come into the supermarket game, you’ve got upwards of 10,000 different brands on shelves,” he said.

“I reckon 90 per cent of items on the shelf are cheaper but if anyone finds things that are more expensive I’m happy to beat it by 10 per cent. It’s not a gimmick, it’s my guarantee that I’m that confident that the prices are cheaper.”

A spot check by news.com.au found a 240g piece of rump steak priced at $8, two litres of milk a little over $3, an 18-pack of toilet paper for $9.50 and bananas at $3.99 per kilogram.

Shoppers need an LMCT+ membership to buy from the store, but non-members can sign up there from $99 a year. Portelli pushed back on criticism from people who “expect things for free”, saying not every product can be dramatically discounted.

“It’s a double-edged sword for us. On one hand we can bring all these people in but on the other hand you got to remember if you’ve got a $1 chocolate bar there’s not that much of a margin in those,” he said.

“I’m not going to have a 70 per cent discount because I still have to buy the product from the suppliers … but there are significant savings over the course of the trolley.

“People will see – once they start comparing receipts – a big difference.”

He said the annual membership fee would more than pay for itself.

“Your $99 membership, between the petrol and the supermarkets, will save you over $1000 easily,” he said.

Portelli also insisted lower prices had not come at the expense of standards, saying he “hasn’t skimped on quality”.

That was echoed by shoppers speaking to news.com.au, particularly about the fruit and vegetables. First-time LMCT+ customer Paula said she had been impressed by what she saw and had visited because of cost-of-living pressure.

“The fruit and veggies look really fresh, nice and are cheaper,” first-time LMCT+ shopper Paula said.

“I can see you save a bit here and there, but fruit and veggies – you’re definitely saving.”

“In today’s society, a cent is a cent so it’s just cheaper and helps mum out as well. I was more curious to have a look.”

Another shopper, Mel, said she went along to see whether the buzz was justified.

“The fresh produce so far is amazing, it’s really fresh. You don’t get any off bits,” she said.

Portelli said the project was not about chasing a fast profit, but about creating a better experience for shoppers.

“If I wanted to make a quick cash-grab out of this I would open it up to the public and let everyone in, but it’s not that. I’d be happy to break even if we can and people are enjoying it,” he said.

“We want to make groceries fun and they’re spending a lot of money here, so we want to make them feel like a valued customer.”